Identifying Innovative Capabilities

Identifying Innovative Capabilities

The success of a firm is dependent on its uniqueness to identify and build its competitive capabilities. Firms vary from each other in terms of history, organization structure, and value chain configuration among others. The firm should identify their competence, build their capacity, and strengthen their abilities. The technique applied in the identification of innovative capabilities for a particular firm involves identification of key attributes, mapping the attributes to competencies, and resources and sustenance, protection, and exploitation of competencies. When applied, this technique is influential in the success of a firm’s competencies and capabilities.

The Key Idea

The first step towards the attainment of competitiveness and competitive advantage is the identification of the key elements of the best products and services offered by the organization. For sustainable competitiveness, a firm making secondary sales should have an advantage in the market share as customers making repeat purchases prefer them to new products. The sustenance of competitive advantage depends on three conditions. First, customer perception should be such that a clear variation of essential attributes exists between the firm’s product and service, and the competitor’s attributes. The second condition stipulates that this distinction directly influences the capability gap that exists between the competitors and the producer. Thirdly, the capability gap and the variation of essential attributes may last for a period (Wang, 2014). There exist only four types of resource capability namely regulatory, organizational, positional, and business systems. These capabilities enable the firm to develop product and delivery attributes that define its competitive advantage in the market. These product or delivery attributes should match customer preference and include price, image, quality, specification among others.

The mapping of attributes to resources and competencies is another key technique towards the attainment of capability and competence advantage of a firm. The resources producing exist in various capabilities framework namely regulatory, positional, functional, and cultural capabilities (Hatten, 2018). These capability frameworks are tabulated in the form of attribute matrix as shown below

Resources occurring frequently in the matrix body constitute the firm’s strategic competencies.

An example of a company

The Walmart Company is one of the companies that exhibits a competitive advantage through its image, product pricing, user-friendly quality goods, and its quality of overall customer services. Walmart Company has displayed the ability to utilize its competitive features effectively thus achieving its competitive advantage (Panmore Institute, 2020). The financial strength of the company enables it to rise consistently and outweigh the competitive powers.

Walmart Company has displayed the ability to vary the product volume and the product specification thus allowing it to expand. The international presence and expansion of the brand to great strengths have increased over the years from the revenue collected from goods sales. Today, the company operates in over 25 countries and has over 10 000 stores operating globally. The ecommerce has enabled made it possible to increase the volume of goods (Panmore Institute, 2020)  The strong brand of the Walmart Company has increased its popularity and the low-cost financial model has enhanced its financial strengths, which has enabled it to operate on a large-scale basis.

Walmart’s focus on customer service and cheap customer-friendly prices enables it to build a loyal ensuing among the regular customers thus making it a fierce competitor in retail marketing. It generates many sales per market area by ensuring customer satisfaction as one of their major concern. The competitive retail discounting has enabled the company to survive constant struggles and competition from more established companies. Domestic and international goods diversification into grocery has boosted customer satisfaction and a promise of a diverse dynamic growth to the customers (Panmore institute, 2020). Satisfactory customer service has made Walmart a reliable and a winning business in a highly competitive market.

The regulation capability of the Walmart Company and a highly organized government is one of the factors that has made Walmart a success. The executive committee and the compensation committee has promoted ethical behavior through the Walmart Statement of ethics. A well-structured e-commerce handles customer’s questions and makes sure that all concerns are addressed and quick responses provided to their demands. Ethical consideration ensures that the image and the companies’ reputation are maintained thereby alluding to customer preference.

Conclusion

In conclusion, the identification and implementation of innovative ideas in a firm enhances its competitiveness in the market. The firm’s uniqueness in terms of model, popularity and fiscal strength yield to competitive advantage in the market, thus enables a firm exploit her economies of scale, and transfer the benefit to their consumers in terms of lowered prices. Consequently, the firm attains popularity and customer convenience, which improves market competitiveness capabilities.

References

Hatten, T. S. (2018). Small Business Management: Creating a Sustainable Competitive Advantage. SAGE Publications.

Panmore Institute. 2020. Walmart’s generic competitive strategy and intensive growth strategies – Panmore Institute.  Available at: <http://panmore.com/walmart-generic-competitive-strategy-intensive-growth-strategies> [Accessed 13 July 2020].

Wang, H. L. (2014). Theories for competitive advantage.