Core competencies and competitive advantage are essential for ensuring a company’s success, which is especially true in the case of a highly competitive market. To properly execute the vision and strategy of the company, it is important to focus on the core competencies, such as product invention, human resources, and awareness. They are critical to ensure that the products have a competitive advantage in regards to high end technology, outstanding performance metrics, and adherence to the size segment. The decisions needed to develop these core competencies revolve around proper human resource management through talent acquisition and retention, awareness of the market dynamics through market analysis, and research and development of novel technology.
Competencies and Competitive Advantage
For the company to succeed by implementing its strategy, where the main focus is put on high end alternatives, it is critical to identify the core competencies, on which the company should accentuate throughout the operations. The top three competencies, which need to be executed to adhere to the vision and strategy in the marketplace, are awareness, product invention, and human resources. These competencies are highly interconnected, where awareness sets direction, and human resources affect the product invention processes. The selected competencies are required to ensure that the company’s products are high end, have outstanding size, and exhibit the top performance.
The decisions involved in the development of the core competencies revolve around working on each competence with an understanding of their unity. In the case of awareness, the decision needs to be made, which focuses on the analysis and assessment of the market and consumer preferences in regards to high end and high performance products. In other words, extensive comprehension of the customer expectations and competitors’ developments need to be factored in because awareness will set the general direction for other core competencies.
In the case of product invention, the selected core competency is needed for ensuring that the products are high end and have high performance with outstanding size metrics. The decision associated with it is centered around research and development, which is critical for making sure that novel technological solutions are being constantly produced. Marketing of interaction with consumers is most fully revealed in the process of creating a new product, where both the consumer and the enterprise are involved in the process of interaction. A product can be understood as a market offer of an enterprise, which is a material object and all related services designed to meet the needs and desires of consumers.
To meet the needs of the consumer as the end user of the product, as well as as the main force influencing the profitability of a new product, it is proposed to highlight the concept of a new product from the perspective of the consumer. It seems appropriate to consider the concept of a new product taking into account the globalization of the world economy and the opening of borders of countries for the free movement of goods and services, as well as consumers and producers. It is proposed to classify new products in two categories, such as new to the consumer product and modifications through changes in product price, quality, appearance, technical characteristics, functionality, and positioning of existing products on the market.
It should be noted that in the case of considering a specific market, from the perspective of the consumer, the third category of a new product can be distinguished, which is a new product for this specific market, but available on the world market. This classification covers all existing options for new products from a consumer perspective that can be created by an enterprise to meet consumer needs. Based on this classification of new products, the strategy of the interaction of an enterprise with consumers in the process of developing a new product is broken down into a strategy of interaction with consumers when creating a completely new product for the market. In addition, the aspect of the strategy of the interaction of the enterprise with consumers is important when developing a modification of an existing product on the market.
To have a complete understanding of the market and achieve major results in research and development, it is important to have highly competent employees, such as engineers, scientists, and market analysts. Therefore, the decision for the core competence of human resources revolves around talent acquisition and retention. Today, innovation is key to achieving a sustainable competitive advantage for a company. It is vital to note that the main purpose of human resource management is to stimulate employee involvement in innovation.
The goal of human resource management is to create behavioral leverage through engagement, motivation, collaboration, and partnership. This leads to the creation of resultant leverage of operational efficiency, which leads to innovation, productivity, and quality. It ultimately translates into the company’s financial performance. The resulting leverage of performance is especially important in long-term performance. This is because the impact of work on innovation, especially in strategic importance, often differs over time. The problem is that motivation is rigidly tied to engagement, in which collaboration and partnership are elements of participation, in the broadest sense of the word, which in turn is a key practice in human resource management.
The next area is focused on finding a structure for HRM to increase its effectiveness, understood as a direct impact on organizational effectiveness, to the maximum possible level. This lies at the heart of the concept of human resource management based on highly efficient labor systems. Systems that conform to the stated principles often vary significantly in many key techniques and are named differently. In addition, companies using such solutions are not always aware that they are part of the concept.
By working on obtaining and developing these core competencies, the company will ensure that it will be able to gain a competitive advantage in offering the market the products, which are high end, high performance, and outstanding in size. Therefore, the competitive advantage will be manifested in differentiation and focus on the product, where there will be no better alternatives for the company’s products in the market.
The identification of key success measures is critical to properly determine the overall performance of the company. In the given case, there are four primary performance measures, which are cumulative effort (10%), average ROS (30%), average ROE (35%), and ending stock price (25%). These are the most relevant and important measures of success because the company primarily focuses on producing high end and high performance products with outstanding size metrics. Therefore, the strategy revolves around developing a top-notch product, which has no or minimal competition in the market, which means that the profits will be mainly generated by profit margins rather than volume. Cumulative profit is critical because it shows that the company is profitable, and it needs to be profitable to advance in the market through the production of technologically advanced products, which are primarily generated through research and development.
However, since the majority of profits will be reinvested back into the company for R&D and talent acquisition, it plays the least role in the measurement of success. The company will produce top-notch products, which will generate revenue and profit, not due to the volume of sales, but rather profit margin, which means that average ROS is an essential metric. It comes as a second in priority since the company also needs outside investments to make big leaps in innovation and product reinvention through R&D. The investments will be attracted through proper average ROE metrics, which signals shareholders that the company is using every dollar most effectively. Lastly, ending stock price is important due to the fact that independent investors should value the company to attract more outside investments, which are vital for R&D and talent acquisition. The values are assigned as such because average ROE is the most important success measure, which is followed by average ROS, which is followed by ending stock price. The least important, but important, is cumulative profit.
In conclusion, the company’s core competencies revolve around awareness, product reinvention, and human resources. The market needs to be well-analyzed to set the general direction for improvement and innovation. Human resources lead to competitiveness in talent acquisition and retention, which are necessary for product reinvention done by R&D. The company will also focus on success measures, such as stock price, average ROE and ROS, and cumulative profit.