The Three-Stage Process of Developing and Strengthening Competences and Capabilities
1. Building core competences and competitive capabilities is a time consuming, managerially challenging exercise.
2. The capability building process has three stages:
a. Stage 1: First, the organization must develop the ability to do something, however imperfectly or inefficiently
b. Stage 2: As experience grows and company personnel learn how to perform the activity consistently well and at an acceptable cost, the ability evolves into a tried and true competence or capability
c. Stage 3: Should the organization continue to polish and refine its know-how and otherwise sharpen its performance such that it becomes better than rivals at performing the activity, the core competence rises to the rank of a distinctive competence, thus providing a path to competitive advantage