Growth Champions: The Battle for Sustained Innovation Leadership

CHAPTER 4

New Approaches to Growth

Whereas core competence thinking majored on organizations concentrating on what they were good at, the idea of a distinctive competence is focused on doing something that organizations are uniquely capable of and so offers greater competitive advantage. This is an area that has been attracting much discussion in both academic and business communities and is key to how many organizations are now looking at their overall strategies for growth.

Back in the late 1950s when Philip Sleznick first coined the term, the concept of distinctive competence came from the belief that there are certain market-facing strengths in some organizations (such as a strong brand) that enable them to succeed. In the 1970s Kenneth Andrews and Howard Stevenson built on this view, suggesting that distinctive competence is a set of activities, such as technology development, which an organization could perform particularly well in comparison to its peers. This generated wide-ranging debate because what one person may see as distinctive another may well view as a commodity. The challenge, and the opportunity, is for a company to not only be clear about what its distinctive competences are and why they matter, but also in developing them so that they are a unique source of differentiation.

Resource-Based View

In recent years, academic focus on distinctive competences has moved on to what has been termed the ‘resource-based view’ of how companies succeed.

This shift has become ...