Watch this with a 10-15 minute audiotrack at http://vimeo.com/novusprogram/lesson21 The goal of this lesson is to provide participants with the tools to identify how to utilize core assets or strengths within their company. Participants should have a clear understanding of the importance of distinguishing in which things they excel and structuring their strategy around these areas. Using these identified strengths, participants will be provided two frequently used strategies to gain a competitive advantage within their market. The Novus project is a combination of video tutorials designed to be used in conjunction with a free business simulation software program. The Novus Business and IT Program contains 36 business and IT training videos, covering basic finance, accounting, marketing, economics, business strategy, Word, Excel, and PowerPoint. Users will have an opportunity to apply the lessons in the Novus Business Simulator. Over six rounds, the user or teams will have to make decisions on capital purchases, financing, production, financing, and human resources for a microbrewery. This channel has arranged the 36 video lessons into the order in which they are meant to be used with the simulator. To watch this slideshow as a video, please go to our Vimeo page at: https://vimeo.com/novusprogram. To download our free business simulation software, please go to our SourceForge page at: http://sourceforge.net/projects/novus/.

1. Core Competencies &
Competitive Advantage
Objective: To tools to identify how to utilize core assets or strengths within
a company. Participants should have a clear understanding of the
importance of distinguishing in which things they excel and structuring their
strategy around these areas.
Novus Business and IT Training Program

2. Lesson Overview
• Always competitors!
• Purpose:
– Identify top strengths/assets (COMPETENCIES)
– Use competencies as building blocks
– Develop strategies to be a stable, long-term leader in
your market
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3. What are Core Competencies?
• Assets that set your
company apart
• Subset of strengths from
SWOT analysis
• Meet the following
conditions:
– It provides benefits to the
customer
– It is hard to imitate
– It provides access to a wide
variety of markets
• “The roots of your tree.”
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4. Identifying Your Core Competencies
• Techniques:
– Compile a list of company assets (both
tangible/intangible)
– Identify which of your products have succeeded in
the past
– Consider what positive reviews you’ve received from
your customers
• Be realistic
• Align with long-term goals
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5. The Core Competency Difference
• Identify your competencies
• Develop your
competencies
• Structure your
organization around your
competencies
• Involve core competencies
in all end products
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6. Competitive Advantage
• Competitive advantage is having greater profits
than the average for the industry
– Superior assets
– Superb capabilities
– Key success factors
• No core competencies = below average
performance = no competitive advantage
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7. Strategies of Competitive Advantage
Cost Leadership Differentiation
• Similar product at a lower • Unique product at a higher
price price
Understand both strategies and aim to achieve one
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8. Cost Leadership
• Do not disregard
differentiation
• Product must be comparable
• Not good if many
competitors are trying to
become “the cost leader”
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9. Differentiation
• Unique in some way greatly VALUED by
customer
– A better product
– A quicker delivery system
– A stronger marketing approach
– Better customer service
– Longer product warranties
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10. Review
Core Competencies Competitive Advantage
• Provide benefit to the • Lowest cost provider
customer • Better/more unique product
• Be hard to imitate
• Supply access to a wide
variety of market
Core competencies + competitive advantage =
long-term success
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11. Activity
In your groups with the company provided to by your
instructor (café, clothing department, restaurant, or bar)
answer the questions below. Please create/imagine any
missing information and indicate it in your answers.
• What are your assets? Please list 5-7.
• Select 2 of your top assets. What are ways to develop or improve
these assets?
• Determine whether any of these assets can be a core competency
using the criteria below. Explain why or why not.
– Does it provide benefits to the customer?
– Is it hard to imitate?
– Does it offer access to a wide variety of markets?
• Which one of the two strategies discussed to achieve a
competitive advantage does your company have the potential to
achieve? Why? How would you go about achieving this?
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