Building on Competencies to Spur Growth
In the complex world of today’s business, the company that operates globally has to grapple with a variety of factors. In the light of increasing competition, successful advancement depends on the ability to use effectively such complex phenomena as distinctive competence, scope of operations, resource deployment, synergy, SWOT Analysis, strategic Goals, single-business strategy, related diversification, unrelated diversification. Many organizations possess “capabilities allowing them to perform key activities exceptionally well” (Love, 1999, p.2).
These capabilities have been termed “distinctive competencies”. To these qualities, one can attribute, for example, the exceptional ability of companies like Apple Computer or Intel to deliver technological innovation that puts them ahead of their competitors. Such competencies allow outstanding companies to thrive in the toughest environments, commanding prestige and recognition among consumers. Keeping track of competencies is important when a company makes a decision for either related or unrelated diversification.
Related diversification is usually a more straightforward decision since it allows companies to make a move to an area where they can “transfer expertise/capabilities/technology”. An example can be Johnson and Johnson with its line of both prescription and non-prescription drugs complemented by goods like band aids and baby products. Unrelated diversification allows fewer synergies overall, but allows companies to spread risk across different industries. An example is Disney with its movies along with theme parks and Disney Cruise Line. Summing it up, managers of modern companies face a multitude of challenges.
To cope with those, they have to apply tools of strategic analysis. This allows them to address the challenges of modern life adequately.
References Love, L. G. (1999). Distinctive Competencies and Competitive Advantage: A Study of Small Independent Retailers. Retrieved April 10, 2007, from http://www. usasbe. org/knowledge/proceedings/1999/love. pdf University of New Mexico. (n. d. ). Strategic Management. Retrieved April 10, 2007, from http://mgtclass. mgt. unm. edu/Patterson/Lectures/Corporate%20and%20International%20Strategies. ppt.