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Core or Competitive Competence
in Hospitality Industry?

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By Robin Trehan (B.A, MIB, MBA). Vice President, National Hotel Exchange and CBK Family, August 2005

Is there any core competence, and can it make you a winner? Actually No, I think there is only one competence that can make you a winner in the Hospitality industry; and that is competitive competence. The core competence is only useful as long as it is your competitive competence. Once the company looses there competitive competitiveness, they loose everything. Therefore in today’s business world where competitive landscape sizzles with innovation, the competitive competitiveness must be robust enough to stand, and yet flexible enough to evolve as conditions demand.

Competitive-competence is at the heart of a company’s ability to compete. It can be distinctive technological expertise, or skill set to provide better benefits to customers that rivals cannot match. The creation and provision of customer value that other companies cannot compete is the essence of competitive-competence and is not limited to any particular industry.

The mantra today is to obsolete innovation and maintain our competitive competitiveness

Development of these key capabilities has strategic importance for any organization, as they offer the following benefits: 

  1. Reduce operational costs,
  2. Increase organizational effectiveness,
  3. Increase market share,
  4. Improve customer retention, 
  5. Innovate faster and reduce cycle times,
  6. Identify new opportunities ahead of competitors.
To maintain competitive competence, a program to maintain overall ‘edge’, should be undertaken. This program should evaluate everything an organization does from its base level and should flowchart the progress of that program from start to finish, and analyze it for its inefficiencies.  Changes to the process should then be put in place and again evaluated.  By the end of the program, the processes should operate at peak efficiencies to create time management, cost savings, and employee productivity which lead to overall competitive competitiveness. 

The point to be understood here is that any company can have a core competence, but it is competitive competence which gives them a chance to win. For example, Ritz-Carlton, Fairmont, Loews, Four Seasons, Intern-Continental, W Hotel, Hotel Sofitel, Le Meridien are ruling the hospitality industry. This is because of there ability to set up state of the art hotels and their ability to provide exceptional customer service with focus on customer relationship management. The customer relationship is a unique selling point (USP). The “Service” is both their core competitiveness and also their competitive competence. 

Possessing a clear competitive-competence is a common characteristic of today's winning companies, and is directly tied to their competition strategies. As an assessment standard for competitive-competence management, some companies focus on added value, which indicates the degree their products stand out from competitor’s products, vertical integration based on the perspective of the final customers. 

Competitive competency does not necessarily have to be a core competency of the company.  An example would be that a company has a better customer relationship management (CRM) system than its competitors.  Company “A” has greater customer service, which creates a competitive competency not shared by their competitors.  This doesn't necessarily mean that CRM is the company's core competency, it just means that it is a way they differentiate themselves. 

The new world of business puts less premium on playing by pre-defined rules and more on understanding and adapting as the rules of the game, as well as the game itself keeps changing. The corporate world is now encountering not only unprecedented pace of change but also radical discontinuities in such changes that make yesterday’s best practices tomorrow’s core rigidities. The new world imposes a greater need for ongoing questioning of the programmed logic, very high level of adaptability to incorporate dynamic changes into the business and information architecture and ability to develop and grow systems that can be readily adapted for the dynamically changing business environment. 

Organizations operating in the new business environment therefore need to be adept at creation and application of new knowledge as well as ongoing renewal of existing knowledge to create knowledge based organization. Making yourself competitive day after day is the need of the hour. The core and competitive should run hand in hand. The concept of core competence is that a company succeeds by leveraging what it is good at. Competitive competence is the sustainable ability to not only create but also capture value.



Robin C. Trehan is in charge at CBK Family and National Hotel exchange for taking the organization towards a REIT (Real Estate Investment Trust). He is also an industry consultant in the field of mergers and acquisitions of real estate & development companies. He can be reached at robin@cbkfamily.com
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Contact:

Robin Trehan
Managing Director & Vice President
National Hotel Exchange and CBK Family
123 West Madison St., Suite 402 
Chicago, IL-60602
Phone 312-920-1900, 312-920-1555
1-866-NHE-HOTEL
Fax     312-920-1950
robin@cbkfamily.com
www.nationalhotelexchange.com
www.cbkfamily.com

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Also See: Examining the Best Approach to Each Hospitality Asset - National Hotel Exchange / July 2005
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