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Core competencies are specific factors treasured and seen by a company to be central to the way its employees or itself work and conduct itself. They are strengths of the company in particular, relative to the other organizations present in the industry which avail a basis that is fundamental for providing added values. They are collectively all the learning processes in the given company, and involve how diverse production skills can be coordinated and how streams of multiple technologies can be integrated. They are communication, involvement and an in depth commitment towards working beyond the boundaries of the organization. The core competencies are fundamental to the products that are core to a company, but their applications are not limited to one core product. There are three criteria that core competencies fulfill, namely: providing benefits to the consumer, making it hard for imitation by competitors and they can be widely leveraged to many markets and products.
The company of my research is a service company. It is a business that is fast growing. There are four types of service firms when all task dimensions are considered. They include: Service factories, service stores service shops, and service complexes. Service factories mainly involve the routine processes that integrated tightly in delivery. For instance, there are car rental firms and fast food restaurants among others. Service stores avail routinely services which are disintegrated in terms of delivery. Examples of service stores include insurance companies, departmental stores, airlines, banks and hotels among others. On the side of service shops, craft work or non-routine knowledge is integrated closely while delivery is being done. For instance, there are small professional and consulting offices, auto-repair shops, and personal services. Lastly, service complexes are involved in the work of non-routine knowledge which is decoupled in delivery such as large clinics, hospitals, investment banking, large consulting firms and large advertising agents. The choice of the firm type is a very important strategic decision which influences the manner in which the company competes with others of its own kind. The approach that dominates the manner in which business is done dictates the type a company is. The most vital and major goal of research on service is to find out which the types of core competences that strongly influences the improvement of the way different service industry perform. According to Zeithaml, Parasuraman and Berry (1990), there are five broad core competences that influence the satisfaction of a customer. They include tangibles, reliability, responsiveness, assurance, and empathy. These core competencies are supposed to be integrated into the processes of forming strategies for marketing together with product price, differentiation, distribution, and promotion.
Looking at responsiveness as one of the five attributes of service quality which form the core competences of a firm, it can be viewed in two different ways. That is it is the willingness of a firm to help its esteemed customers and being ready at all times to provide services that are prompt. The way a company will generally treat its customers and provide them with the services that they may require each time without inconveniencing them in any way, will to a great extent determine the competence of that company in the market competition. Competitive sustainable advantage would not come by the virtue of doing the same things better but doing the things that are very critical in a different way that is hard to be copied. This core competence can achieve the advantage of competitiveness in the four types of service businesses mentioned earlier. In as much as this attribute of service quality may look to be easy to copy at the first glance, in actual sense it very hard to build and to copy. This core competence in service firms will depend less on machine settings but a lot more on employees who are committed. A human resource management that is effective is necessary for the core competences in any service setting to be implemented.
There are three tests that a core competency must meet. It must deliver a benefit that can be perceived by a customer, relatively be able to exercise uniqueness to the company and lastly, it must exercise abilities of being extended to other lines of product. When responsiveness is critically examined, it delivers a benefit that is perceived by the customer in that the customer is helped immediately whenever he needs and the services his requests are availed appropriately. The upper management of the company has a responsibility to think and strategically act through fixing their attention on identifying, nurturing and acquiring of the core competencies. The employees should be different types of businesses through a careful program of rotation at the early time of their careers. The carriers of the competence should also be brought together by the upper management regularly from across the whole company for the sole purposes of trading notes and ideas. The management should also win leadership in manufacturing of core products and get the global share by using brand building programs that aim at exploiting the scope economies. It should also add value through the enunciation of the strategic architecture guiding the process of competence acquisition.
Reliability, being one of the major core competencies that focuses on the ability of a company to do a service accurately and dependably, has led the service industry to shift from the use of labor alone to the use of information technology. This is an innovation that has easily reduced the large amount of work that was initially solely done by labor. This innovation has led to the realization of large turnovers and consequently great incomes to the service industry since much work is done quickly, efficiently and accurately over a short period of time. The innovation of information technology has also greatly improved the competitiveness of the service industry in the market competition with other industries. The innovation furthered the continuity of the market in the service industry due to the fact that more quality services could now be offered at equally the same prices of the market. With the innovation, companies had to make adjustments in their service architecture and products in a bid to meet the intense competition brought about and to adapt the new ways of offering their services in a better way using the information technology.
The strategies surrounding the core competencies among them are the acquisition of the core competencies by companies so that they may be able to partake of the long term planning required for a corporation. The ongoing business concerns ought to be working on the increasing improvements to service and process to help guarantee an inflow of revenue from already established products. Companies should also focus on the core competencies that are to be acquired. The key consideration when core competencies are being planned for should be how narrowly or broadly certain desired core competencies are defined. Organizational inertia is another strategy where commitment to the upcoming new core competencies is accomplished best by a new division.