Competitive advantage is sought after by every company; yet by everyone chasing the same core capabilities, they become undifferentiated carbon copies. It’s better to play to your individual strengths, thus allowing your company to stand out uniquely.
Contrary to common belief, a powerful, sustainable, competitive advantage is unlikely to arise from a single capability; a collection of capabilities that reinforce one another is key. The ways that various capabilities interact and support one another often allows for a sustainable competitive advantage to emerge naturally.
A clearly laid out system of activities, capturing the core capabilities of the firm on a single page, can be used to map out the connections between a company’s different capabilities, and can help delineate how such activities are different from competitors’.
When articulating core capabilities, carefully distinguish between generic strengths and critical, mutually reinforcing activities.
While it may be tempting to simply ask yourself what you are really good at, and attempt to build a strategy from there, those core competencies may be irrelevant to consumers, and my confer no competitive advantage.
The best core capabilities include:
Creating and building brands.
Partnering, and going to market, with suppliers.
Leveraging global scale.