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CA Intermediate · Financial Management and Strategic Management · Strategic Analysis: Internal Environment

Meera Retail has a core competence in fast, low-cost last-mile delivery. It wants to test whether this is a true core competence. Which characteristic would show that it is NOT a core competence?

A capability that competitors can easily copy or buy in the open market is not a core competence. Core competences must be valuable to customers, usable across several products or markets, and hard for rivals to imitate, so that they give lasting advantage.

  1. AIt makes a significant contribution to customer-perceived value
  2. BIt can be leveraged across many products and markets
  3. CIt is easily copied by competitors and available in the open marketCorrect
  4. DIt is difficult for competitors to imitate

Explanation

A core competence must be hard to imitate, valuable to customers and extendable to multiple markets. If rivals can easily copy or buy it, it cannot provide lasting advantage and so is not a core competence.

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