What distinguishes the successful firm
How can business strategies add value? What distinguishes the successful
firm is the fundamental question in business strategy, and one which most
senior managers consistently ask themselves.
Companies with distinctive capabilities have attributes which others not
have and cannot replicate, not even after they realize the benefit they offer
to the company which originally possesses them.
In "Foundations of Corporate Success", John Kay argues that the best businesses
derive their strength from a distinctive structure of relationships with employees,
customers, and suppliers. He explains why continuity and stability in these
relationships is essential for a flexible and co-operative response to change.
Three Distinctive Capabilities
According to John Kay, there are three Distinctive Capabilities which a
company can possess to create added value and achieve competitive advantage
Architecture. A structure of relational contacts within or around
the organization with employees and with customers and suppliers.
Reputation. Built up through:
- Customer's own experience.
- Quality signals.
- Demonstrations and free trials.
- Word of mouth spreading.
- Association with other brands.
- Staking the reputation once it is established.
Innovation. Provided the innovation is translated to competitive
Book: John Kay
- Foundations of Corporate Success -
Distinctive Capabilities Special Interest Group
Special Interest Group (9 members)
All of Kay's distinctive capabilities to achieve a competitive advantage are based on relationships.
But besides relationships, other capabil...
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