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What does distinctive competence mean for my business?

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Last editedSep 20202 min read

Identikit businesses never succeed, and why should they? If there’s nothing to set your business apart from the competition, then there’s no reason for customers to give you their hard-earned cash. That’s why differentiation in business is so important. So, how do you go about separating yourself from the pack and forging a unique business proposition that customers will flock to? It’s all about the development of “distinctive competencies.” Find out a little more about how a distinctive competence can give your company a competitive edge, right here. First off, explore our distinctive competence definition.

What is a distinctive competence?

A distinctive competence is one of the characteristics that sets your business apart from the competition. Distinctive competencies can occur in a range of different areas, including marketing, personnel, customer relations, technology, manufacturing, and so on. For a skill/practice to be considered a distinctive competence, it shouldn't be something that could be imitated (in the short-term) by your competitors. If your business’s characteristics are easy to duplicate, then they probably aren’t distinctive competencies in any meaningful sense.

Examples of distinctive competence

Now that you know a little more about the definition of distinctive competence, let’s look at how this concept works in practice. Examples of distinctive competence include rigorous security measures, economies of scale, and lean manufacturing processes. If you’re interested in real-world examples of distinctive competence, let’s look at Amazon. The e-commerce giant has a wide range of distinctive competencies, including name recognition, cutting-edge distribution, and an immensely talented workforce. Smaller companies, such as an organic clothing range, may offer the distinctive competence of high-quality, environmentally friendly products sourced from local manufacturers.

How to define your business’s distinctive competence

To work out your company’s distinctive competence, it’s important to identify the strengths and weaknesses of your business. You can do this by conducting an internal/external review of your firm’s corporate environment. Analyze the importance of these strengths and weaknesses within the current market. Then, you should review the needs of the market and look for any advantages that your business has over the competition. After you identify a strength that satisfies specific market needs and provides your company with an advantage, you’ve identified a distinctive competence.

What are the advantages of a distinctive competence?

Developing a distinctive competence is important for the long-term success of your business. Not only does it provide you with an increased competitive advantage, but it can help to improve customer loyalty, as you’ll be providing a level of service that’s unique to your business. It’s also worth noting that your company’s distinctive competencies can change over time. As the market shifts and new technologies or products come to the forefront, your business’s capabilities may also need to change. As such, you should conduct internal reviews of your business on a regular basis to ensure that your distinctive competencies meet the requirements of new trends in the market.

Distinctive vs. core competencies

While you’re researching the definition of distinctive competence, you’ll probably encounter the term “core competencies” as well. Essentially, a core competence is anything that a business does extremely well and is generally considered to be critical to the business’s overall performance. For example, a marketing agency’s ability to generate data-led campaign ideas would be a core competency. By contrast, a distinctive competence is unique and provides a competitive advantage. So, when it comes to distinctive vs. core competencies, the fact that a distinctive competence has a distinguishing characteristic is what sets it apart from a core competence.

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