MBA 206-MARKETING MANAGEMENT

MBA Course, AY 2021-2022

DEVELOPING MARKETING STRATEGIES AND PLAN

“CORE COMPETENCY”
(Reporter: Mitchelle C. Hutalla)

I. INTRODUCTION

For the firm’s long-term growth, business continuity and success, they
have to build and maintain skills, resources and capabilities that will make
them stand out from their competitors. This report will tackle the
importance of core competency in developing marketing strategies and
plan for new business entrants and the existing firm’s as well. It will show
the “in practice applications” of some famous brands’ core competence for
concrete visualization of their strategies to maintain and protect their
brands. The key take-away of this topic is that all the firm’s processes,
advertising efforts, sponsorship programs, reputation management must be
consistent with their identified core competencies to maintain and improve
their competitiveness and unique market position.

II. DEFINITION OF TERMS

COMPETITIVE ADVANTAGE – a condition or circumstance that puts a

company in favorable or superior business operations.

COMPETITIVE DIFFERENTIATION – is a strategic positioning tactic an

organization can undertake to set its products, service, and brands apart
from those its competitors.

CORE COMPETENCY - is a concept in management theory which can be

defined as a “harmonized combination of multiple resources and skills that
distinguish a firm in the marketplace”.

CORE VALUES – are the root beliefs that a person or organization

operates from. They are the principle perspectives that guide a person or
organization’s behavior with others.
 CUSTOMER VALUE – is the perception of what a product or service is
worth to a customer versus the possible alternatives.

VRIO MODEL - is an initialism for the four question framework asked

about a resource or capability to determine its competitive potential: The
question of Value, the question of Rarity, the question of Imitability, and
the question of Organization.

III. REPORT CONTENT

UNDERSTANDING CORE COMPETENCY

● It is a concept in management theory which can be defined as a
“harmonized combination of multiple resources and skills that
distinguish a firm in the marketplace”

● It is the vital source of competitive advantage, for a firm over its

competitors, which leads to distinctive capabilities or excellence.

● Core competencies are the defining characteristics that make a firm

stand out from competition.

CHARACTERISTICS OF CORE COMPETENCE

● It creates perceived value for customers (Customer Value) – In the
quest to acquire core competence, the company has to deliver such
products and services to the customers that have some value to
them.

● It has a wider market applicability - The application of core

competence is to the whole organization, as it can be perceived
with the help of collective effort of the entire organization, that
opens up tremendous opportunities for the organization like
having a potential access to a variety of markets.

● It makes difficult for the rival firms to imitate (Competitive

Differentiation) - the product or services offered by the firm must
be “unique” and cannot easily be imitated.

FORMS OF CORE COMPETENCE

● A core competency can take various forms, including technical
know how (capabilities), a reliable processes, technologies, and
even a good relationships with customers and suppliers. It may
also include product development and/ or firm’s culture.
 THE “VRIO” FRAMEWORK

A core competency is simply a resource, capability, or bundle or

resources and capabilities that is “VRIO”. The VRIO framework is a
strategic analysis tool designed to help firms uncover and protect the resources
and capabilities that give a long-term competitive advantage (core
competence) . VRIO is an acronym for a four question framework criteria to
assess the core competence of the firm.
V – Value : Do you offer a resource that adds value for customers?
R – Rarity : Do you own/offer something that’s hard to find yet in
demand?
I – Imitability : Is your resource/capability hard to imitate? Or
expensive
to duplicate?
O – Organization : Does the firm have organized management systems,
processes, structures,and culture to capitalize on resource and
capabilities?

Note: The resources and capabilities that satisfy “all” of the VRIO
Questions are the core competencies of the firm

CORE COMPETENCE vs. COMPETITIVE ADVANTAGE

● Core Competence refers to particular knowledge, skills, or

technology that the competitors cannot follow while Competitive
Advantage refers to a strong point of a firm to perform better than
its rivals.

● Core Competence is excellence in various businesses and products

while Competitive Advantage is the competitive strength against
the competitors.

● Both are inter-connected concepts that focuses on helping

companies gain better footing in the market.
CORE COMPETENCE vs. CORE VALUES

● Core Competencies are specific type of competency. They identify the

key values and strengths shared by everyone in the organization,
regardless of the job they perform.

● Core Values are the beliefs or ideals shared by everyone in the

organization. Values define the things which the firms believed as
important, meaningful and rightful.

Note: It is important to align the core competencies with the core

values
of the firm.

The key for having a successful marketing plan and strategies is knowing first
the capabilities and resources of a firm and establishing its core competencies

CORE COMPETENCY IN PRACTICE

1. HONDA CARS and TOYOTA CARS

● HONDA CARS Core Competency is its Engines and Propulsion

Systems.

Engines and propulsion systems are common to all Honda

pruducts and serve as technical sources of competitive
advantage. Honda was the first car company in 1974 to comply
with strict US emissions regulations on gasoline engines and
produced cars with catalytic converters with its CVCC engine.
This is said to be hard to imitate.

● TOYOTA CARS Core Competency is its Capacity to compete

based on Cost and Price.
 Toyota set strategies and tactics to maximize production
efficiency, minimize losses, and enhance the performance of
various aspects of the business. This results to lowering of
costs and selling prices, which is a factor in Toyota’s ability to
gain a bigger market share.

2. APPLE 1PHONE and SAMSUNG MOBILE PHONE

● APPLE 1PHONE – its Core Competency is INNOVATION. It

has a long history of developing unique and innovative technology
products.

Apple has a system (IOS) set up for rapit innovation, which is a

critical success factor of the business. This resource/capability
enables the corporation to maintain a high rate of innovation
that is especially notable in hardware products like the iPhone.

● SAMSUNG – it’s Core Competency is the ability to get the most

of the android operating system.

Samsung has proactiveness to manufacture wide variety of

products with different configurations. No matter which smart
phone they manufacture, Samsung smart phones are perceived
to have the best operating system and the best quality in the
market.

3. McDONALDS and JOLLIBEE

● McDONALDS’ Core Competency is it’s Brand Image and

Global Presence.

McDonalds has a strong brand image in the market that it has

built over the years. It serves a uniform menu globally with
minor local variations. It is present in around 120 countries
which also allows a brand access to a very large customer base.

● Jollibee’s Core Competence is it’s unique product the emphasize

local spices and local taste preference.

Jollibee has the flexibility to cater to the taste of its local

consumers and built reputation of friendliness, flavorful food,
fun atmosphere, and focus on family.

4. ADIDAS and NIKE SHOES

● The core competency of Adidas is its Strategic Innovation and

Creativity.
 The ADIDAS GROUP aims to generate at least one new
meaningful innovative improvement per year. Adidas uses
cutting edge technology to offer comfort and style in their
product which are light and weight.

● The core competency of NIKE is its Brand Image. NIKE has

built a very strong image in the global market, as an ethical,
innovative, and customer oriented brand.

NIKI is reknowned worldwide as the brand for athletes. It is

the biggest and best sports shoe and apparel brand in the world.
While it designs products mainly for athletic use, its popularity
as leisure wear has continue to grow worldwide.

5. STARBUCKS and NESPRESSO

● Starbucks Core Competency is its High Quality Coffee.

Starbucks is well-known for its expertise in coffee roasting and

hand-built beverages. The company picks high quality coffee
beans which are ethically sourced, then verified and certified by
a third party so that they meet customer’s expectations.

● NESPRESSO’s Core Competency is its Premium Blend Coffee.

As an authentically premium brand, Nespresso is positioned to

capitalize on the North-American single-served market demand
for premiumization.

IV. 5 QUESTIONS

1. Is an automated workflows can be regarded as a core competence?

Ans: Yes, because core competence may be in a form of a

“process” just like the automated workflows

2. When is being “rare” be considered as a core competence?

Ans: Being “rare” and “distinct” can be a competitive advantage

of a firm but it has to offer customer’s value, can’t be
easily be imitated and supported by the organization to
consider it as a core competence.

3. Give at least five (5) sources of core competencies.

Ans: Core competencies can come from its people, capital, brand
equity, assets, and intellectual property.
 4. How does an identification of core competency can help in
developing
a marketing strategy and plan?

Ans: Assessing a firm’s capabilities and resources will help

identify
Its core competencies upon which the marketing
strategy andn plan must be aligned so as to come up with
a
consistent approach to better position the company
within the industry.

5. When does a competitive advantage be regarded as a core

competence?

Ans: When the capabilities or resources can give a “long-term

competitive advantage”, they may be regarded as core
competencies of the firm.

V. REFERENCES (Online Sources)

https://businessjargons.com/core-competence.html
https://en.wikipedia.org/wiki/VRIO
https://indiafreenotes.com/core-competence/
https://www.ipl.org/essay/Samsung-Electronics-Strategic-Strategy-
PKUSJ4NPCEDR
http://themercantilesansaba.com/foreign-service-nmbycy/mcdonald%27s-
business-strategy-analysis-d005da
https://www.academia.edu/40499854/
Strategic_Management20191002_47633_p81i8v
https://www.coursehero.com/file/82154331/Apple-Resources-and-
Capabilitiespdf/
https://www.coursehero.com/file/88934170/T5i-StraMpdf/