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What does it take

While threshold capabilities are important, they do not of themselves create competetive advantages or the basis of superior performance. These are dependent on an organisation having distinctive or unique capabilities that competitors will find difficult to imitate.

Unique resources

This could be because the organisation has unique resources that critically underpin competitive advantages and that others cannot imitate or obtain – a long-established brand, for example. It is however more likely that an organisation achieves competitives advantages because it has distinctive, or core, competences.

The concept

The concept of core competences was developed most notably , by Gary Hamel and C. K. Prahalad. While various definitions exist, here core competences are taken to mean the skills and abilities by which resources are developed through an organisation’s activities and processes such as to acheive competitive advantages in ways that others cannot imitate or obtain.

Suppliers

For example suppliers that acheive competitive advantages in a retail market might have done so on a basic of an unique resource such as a powerful brand or by finding ways of providing services or bulding relationships with that retailer in ways that its  competitors find difficult to imitate – a core competence.