All about distinctive capabilities

By Lim Beng Choon

I often get asked by friends, “What is a good business to be in?” At the risk of sounding cliched, my answer has always been “Take any business and run it well. Then, figure out how to build distinctive capabilities”.

For example, look at Zara, the Spanish clothing manufacturer and retailer. There is nothing new about the retailing business, but they can deliver new styles to their outlets in three to six weeks compared with up to five months for competitors. Or the Dutch insurance company Universal Leven, which has only three employees to look after 23,000 customers. Or Bristol-Myers Squibb’s innovative use of cutting edge technology to achieve overall performance improvements of several thousand days/year in their drug discovery process.

Breaking out
High-performance companies are constantly trying to find new ways to produce the breakout new product, deliver a service or operate a new business model.

When it comes to technology, they avoid the “me too” philosophy and try instead to find new ways to adapt that technology to give them an edge.

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