Supply Chain Management Case Study Example | Topics and Well Written Essays - 2000 words

Supply Chain Management - Case Study Example In this particular article, the authors mentioned the term core competency which can be defined as the collective learning and coordination skills behind the product lines of a firm (Hamel). It was further stated by the authors that core competencies are the main source of competitive advantage and hence they enable the firm to introduce an array of new products and services into the market. Competitive advantage is the critical advantage that a firm possesses in the market over a competitor in the industry. Almost all the firms in the market try to achieve a sustainable competitive advantage ((ICMR), Marketing Management). The other way of expressing the same would be - when sustained profits that are beyond the average industry profits are earned by a firm, then the firm is said to possess a competitive advantage over its competitors present in the market (Administration). The goal of much of the business strategy of every firm would be to achieve a sustainable competitive advantage. There are two basic types of competitive advantages as identified by Michael Porter (Porter). They are the cost advantage and differentiation advantage. A firm that offers the consumer the same value as the competitors, but at a lower cost is said to possess cost advantage, whereas a company that offers superior value to its customers when compared to its competitors, possesses differentiation advantage. These two advantages are called positional advantages as they represent the firm's leading capability in the industry in either of these advantages. The resources of an organization along with its skills create unique competencies. These competencies, in turn, help the firm identify its cost or differentiation advantages and ultimately create value for the customers (Harvard Business Review). The resources of the organization include its brand value, technological know-how, patents and trademarks, and the goodwill of the firm in the market. The skills include its service quality, employee skills and efficiencies (Andrew C. Gross et al). Core Competencies are the basis for the development of core products. Core products are not the ones which are directly sold to the end-user. Instead, they are used in the manufacturing or building of a large array of end products. Let us consider an example of this. Motors are core products which can be used for the manufacturing of many end products like cars, air coolers etc. The business units of the firm are required to tap the few relative core products and then develop a number of end-products that can be used by the end-user by making use of the prevailing technology of core products.  Ã‚