Strategies for Long-term and Consistent Business Growth
A company needs to identify its core competencies and then invest in them, focus resources on building and maintaining those skills that contribute to competencies to ensure long-term growth and success. A company that seeks to develop its core competencies must first isolate or provide a competitive advantage of these capabilities and then transform them into organizational forces. These skills and strengths need to be developed in ways unique to competitors, and that give identified value to customers.
Some management experts say a company should outsource or divest areas outside of core competencies, thus releasing more resources to reinvest in core capabilities. A company must use these capabilities to inform its strategic visions and management priorities in order to support its core competencies. They should aim to communicate its value to its employees, to create a culture based on these skills or capabilities, and use technology to support them. There is a natural development as competition over time comes up and what once became a core competency is no longer a competitive differentiation requirement. Organizations must continuously develop new technology, skills, and assets to remain competitive and play to win in the future.
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With global revenue of over $480 billion in 2017, Walmart is the world's largest department stores chain. The enterprise has over 11,000 stores across the whole world. The core competencies of Walmart include its massive buying power and supply chain management. The main slogan of Walmart is “every day low prices.” To make this easier, it utilizes its huge purchasing power to press suppliers constantly to reduce wholesale costs. Walmart excels in all aspects of the management of the supply chain. It has an extensive distribution network and has improved procurement, management, distribution, and integration into a highly efficient inventory management system that results in improved storage of products in shops and reduced costs. Walmart was the first company to implement the Universal Product Code on a global basis to collect and analyze data from individual stores.
Some entrepreneurs now use the term core competencies to gain strength, especially since the strengths of individuals relate to their positions or professions. Some will, therefore, identify the core skills of individual workers as specific skills–such as fostering teamwork or managing change.