Core competencies

Topic 

Core competencies

Instructions

What four criteria must capabilities satisfy for them to become core competencies? Why is it important for firms to use these criteria to evaluate their capabilities’ value-creating potential?

Answer Preview 

Capabilities that are rare, costly to imitate, valuable and non-substitutable are core competencies, and they are also termed as strategic capabilities. It is clear that core competencies are considered to be a source of competitive advantage for a business organization over its competitors. Valuable core competencies permit the business organization to exploit opportunities or defuse threats in its external environment.

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