The Difference Between a Core Competence and a Distinctive Competence

question 137

Multiple Choice

The difference between a core competence and a distinctive competence is that:

• A) a distinctive competence refers to a company's strongest resource or competitive capability,while a core competence refers to a company's lowest-cost and most efficiently executed value-chain activity.
• B) a core competence usually resides in a company's base of intellectual capital,whereas a distinctive competence stems from the superiority of a company's physical and tangible assets.
• C) a core competence is a competitively and strategically relevant activity that a firm performs well compared to its other activities,whereas a distinctive competence is a competitively relevant activity a firm performs well compared to other rival firms.
• D) a core competence represents a resource strength,whereas a distinctive competence is achieved by having more resource strengths than rival companies.
• E) a core competence usually resides in a company's technology and physical assets,whereas a distinctive competence usually resides in a company's know-how,expertise,and intellectual capital.

---

Definitions:

Marginal Cost

The cost incurred by producing one additional unit of a product or service.

Claim Dilution

The reduction in the likelihood of recovery or the value of each creditor’s claim as a result of an increase in the number of claimants or claims against the same debtor or asset.

Secured Loan

A loan that is backed by collateral, providing the lender with assurance that the loan will be repaid.

Unsecured Loan

A loan given without requiring collateral from the borrower.