Tesco's Core Competencies

Core Competencies

Not all of the firm’s resources and capabilities have the potential to provide a competitive advantage to the firm. Many resources and capabilities are needed simply to survive in the global market. But some core assets critically underpin the firm’s overall success-these are called ‘core competencies’, a term which refers to the combination of individual technologies and production skills that underlie a company’s multiple production lines.

For example- Philips core competency in optical media and Sony’s is to miniaturize electronics.

Core Competence Decision

Earlier, in all multinational firms the secret of success lay in interlinkages between different

A core competence provides potential access to a wide variety of markets.

The key core competencies over here enables the creation of new products and services.

For example, Saga has established such a strong leadership in supplying financial services and holidays to old generations. Their core competencies include skills in CRM, leading marketing skills and clear distinctive brand proposition that focuses solely on a closely defined customer

A core competence should make an important contribution to the customer’s benefits of the end product.

The reason as to what causes customers to choose one product over another. For example, Tesco has been the market leader for online grocery shopping which has the core competencies like designing and making supply systems that effectively link existing shops with Tesco’s website, to design a better customer interface, reliable and effective delivery infrastructure.

3. A core competence should be difficult for competitors to imitate.

A core competence must be unique. For example, Dell has a very strong position in personal computing market which include core competencies like online customization of each computer built, good manufacturing and distribution quality, minimization of working capital in production process.

Core competencies have the capacity to desegregate and synchronize different groups in the company. While a company may be able to employ perfectionists in a particular technology, by doing so it does not have a core competence in that technology, it is the synchronization between all the groups involved in bringing a product to market that results in a core competence.

Loss of Core