The Competence Pyramid: A Framework for Identifying and Analyzing Firm and Industry Competence

The core capability and competence perspective is respected by both academics and practitioners. The efficacy of this strategic orientation is dependent on a firm's ability to identify its specific technological competencies and managerial capabilities and match these strengths with the assets necessary to gain competitive advantage in the firm's chosen markets. Here a systematic process for the identification of competencies and capabilities present within a firm and those competencies and capabilities needed for development of competitive advantage in an industry is presented. This system uses a pictorial representation referred to as the competency pyramid. The competency pyramid assists with the implementation of a strategy based on the core competency perspective; by assisting a firm in understanding which competencies they currently posses and which they require for success in the markets they have targeted. The use of the competency pyramid is illustrated using both service and manufacturing examples.