Core Competence: Critical for Business Success in the Digital Age - Essay Sample

Introduction

Core competence is critical when it comes to the success of every business entity. Due to generational differences and the emergence of new forms of technology, there is a need for business leaders to adopt processes that will shape up their core competencies. Besides, choosing the essential skills allows the business managers to forecast and prepare for the future by providing a possible solution to the expected challenges. The businesses that have developed skills can gain an edge of competitiveness against rival firms. Also, the need to stand out by the business entities makes them engage in the promotion of unique aspects of their core competencies since it helps them to attract more customers. Most importantly, companies that can develop useful competencies have higher chances of beating their rivals in the industry hence, reaping the benefits of maximum revenue. Therefore, competition remains the best way for businesses to prove their competence.

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Businesses that demonstrate the ability to develop core competencies can gain competitive advantage through their initiatives, maximizing sales, and revenue. Such firms engage in the innovation processes that enable them to create and deliver new products and services, respectively. During the process of seeking to fill the target market niches, these firms strive to provide quality products in the most efficient manner different from their competitors. Therefore, they create products with better values to the customers. The production of goods and delivery of services that meet the consumers' demands leads to the recognition of the firm by the customers who, in turn, pay back their loyalty by buying most of the products from the same business. Also, through competition, companies can create and establish their brands. Therefore, the individual firms can exploit unique strengths that make their products more competitive in the market than the rival companies making them competent.

According to Agha, Laith and Jamhour (2012), companies with superior and competitive resources and capabilities can adopt strategies to effectively utilize these integral components of business operations to achieve competency. Also, they can sustain the levels of stiff competition depending on the significant characteristics and resources available for them. The firms can extend the time required for maintaining their products, and also their ability to transfer funds to a higher advantage than their rivals. Besides, being competitive in the market also prevents other participants from replicating similar products manufactured and sold by the parent company. Hence, having a competitive strategy enables firms to acquire superior capabilities and resources that boost their levels of competence, allowing them to deliver better performance than their counterparts.

A competitive firm creates a meaningful attribute of market perfection. Through the competitive strategy used by the company, the customers can spot and perceive particular unique selling points by the business that distinguishes their products and services from the ones produced by the competitors (Agha, Laith, and Jamhour, 2012). Using these product attributes, the companies can create impacts in the perception of the buyers concerning the usefulness and the availability of such commodities. For instance, a company can entice the consumers by improving the quality of the products, and offering after-sales service. All these approaches used by the companies have significance in creating competition in the market, making it perfect. Thus, the efforts used by the companies to develop a market perfection lead to a game that leads to the production of improved product quality, which leads to the competency of the leading firms.

Maximizing on competition maximizes the competence of both suppliers and producers (Bogner, Thomas, and McGee, 2009). As the most effective form of regulation, competition remains an intense discipline that enhances the level of a firm's responsiveness to consumers. Moreover, the maximization of competition among the market stakeholders involves the reduction of government barriers hence promoting the competitiveness of various market participants. With the absence of government regulation, firms can increase their competitive advantage accordingly, stimulating the interests of the producers in serving their buyers according to their needs. Thus, it is right to say that more competition is better for business performance because it leads to improved levels of core business competencies.

Staying competitive helps business organizations to explore all the market niches. For instance, smaller companies can explore the markets that the more prominent corporations do not participate in or can merge with other existing firms to acquire a share of the market. Moreover, there is a need for strategic flexibility in the more prominent firms since the changes in the consumers' preferences may prevent them from satisfying all the market segments. Failure to competitively honor the customers' demands, these firms can be overwhelmed by the prevailing market forces. However, when the firms can withstand stiff competition in all the market niches, they can leverage their core competencies. Leveraging the skills helps the companies to integrate their capabilities, giving them a competitive edge of advantage over other market participants.

Competition may lead to the formation of unexpected partnerships that make the business stronger. A competitive firm through mergers can combine resources that help in building a high performing and competent organization (Mills, Platts, Bourne, and Richards, 2016). Again, the companies that unite together to gain a competitive advantage may develop effective ways of recruiting and training the employees in improving their skills and knowledge, which are the core pillars for competency. Businesses that create an alliance with others are capable of exchanging technology and equipment, hence expanding their market operations while at the same time, competitively cross-promoting their products and services beating their rivals. Mergers and acquisitions enhance the capabilities of the individual companies to gain strength in the market-leading to its successful access to the primary resources needed for production. Based on this merge-resource concept, there is a direct relationship between competitiveness and the firm's competence.

Competition leads to long-term planning by the companies which establish new ways of doing things. The absence of competition in the market may lead to failure by other firms to maintain their daily operations. However, with the pressure from the competing business agencies, the primary firm develops new ways of conducting its processes. Moreover, the business operating in a competitive environment can access and build its available technology both internally and externally (Mills et al. 2016). The entry of other participants into the industry challenges the parent company to develop more competitive strategies that help it to raise its bar beyond the capabilities of the new entrants. Therefore, with strategic planning practices into place, the firms can adopt new strategies of handling their competitors while at the same time improving their core competencies.

Firms that operate in competitive markets use the concept of core products that help them to distinguish themselves from other producers. These companies manufacture commodities that allow them to collect their returns above average since their intermediate products may create an improved value chain in the economy. Moreover, the need to develop core products dictates to the firm to consider its competitive ability in exploiting the market so that it creates unique products that aim at improving the quality to the buyers. Again, using a single core product can lead to the creation of more end products within the business just in the same, it can apply the concept of competence to create more refined core products. Hence, such companies gain a competitive advantage over their competitors through the idea of the core products that directly relate to their competitive ability.

Through competition, the majority of the business entities display powerful strategies for their success. Formalizing these strategies presents concrete proof that the firms can project their annual growth rates, as wells as tracing their origin of strategic planning, especially in the matters of budgeting. The concentration of the companies in the budget preparation helps them to eliminate the financial problems related to capital needs; hence, remaining competent in its daily operations. Besides, these companies can also develop other strategic measures that allow it to identify means of limiting their expenditure based on their budgetary targets (Mills et al. 2016). In essence, the ability to strategize in the market helps the companies to understand their products as well as developing a good sense of what their competitors may do next. New strategies in the market make the businesses more competitive than their rivals, leading to their improved performance and competency.

Competitive firms have strategic decision-making approaches leading to their improved operations. Under these approaches, the managers of the concerned businesses are compelled to consider the implications of long-term decisions to the success of the business based on the current and future trends in the market. For instance, forecasting future inflation may lead to the making of choices to allow the firm to access the foreign markets before their competitors engage in the same practice. Such actions may lead to the solidification of the long-term position of the company enabling it to stand out among other competitors in the industry. Moreover, improving decision-making processes also assist organizations in allocating resources through the circulatory flow of capital approaches effectively (Online Masters of Business Administration, 2019). In essence, better decision-making strategies are essential when it comes to competition and competence of the business entities.

Gluck, Kaufman, & Walleck (2018) states that analysis of long-term trends and setting the firm's objective is another competency factor that arises from a competitive advantage. Individual firms engaging in competing business can improve their productivity and also utilize their capital in the best way possible. Moreover, such firms have better capabilities of bringing critical business issues to the surface compared to their competitors. Also, setting the objective of the firm may involve measures of adopting compensation schemes to the managers for their outstanding performance in line with the company's long-term plans. Hence, this category of firms develops similar trends of implementing their long-term strategic strategies in every trading period, allowing them to make adjustments that improve their performance over other competitors in the market. Arguably, business organizations analyzing their long-term trends can adopt aggressive measures that will enhance their core competency in the market.

Despite competition leading to the competence of the business units, it also causes negative impacts that may hinder the performance of the companies. The game itself has become more competitive for small business entities. Due to the changing global economy, the minor industries face hard situations in their commitments towards marching the levels of established firms in the production and delivery of goods and services, respectively. Unlike the positive impacts of large firms, the developing businesses cannot make a profit out of their little efforts since they always worry about how to beat their competitors amidst the challenge of...