A company can be perceived as a portfolio of competencies supported by its internal resources. Its competitiveness is based on the creation and development of competencies and on the realization of a strategy able to create a link between missions, resources and competencies.
The route from knowledge assets to competitive advantages requires strategic management of the knowledge base in the organization. The organization must be able to utilize the available capabilities to provide differentiation in support of its business and work processes. The differentiations in the outputs of these processes (e.g. novel products, innovative business model) will allow the organization to succeed in the marketplace.
In order to ensure that the organization will have the relevant knowledge assets to sustain its competitive advantage, the management needs to identify and select those knowledge assets that provided past successes and those that will be relevant to the future needs of the market. By also identifying the cause of past failures, the management can identify the necessary knowledge to be acquired or developed. After the identification of the relevant knowledge assets, the management needs to implement programs to acquire, develop, and protect these knowledge assets.
The organization should primarily focus their efforts on harnessing existing knowledge and creating new knowledge in the company’s core and value adding activities which would provide the most impacts in terms of competitive advantages. Value chain analysis can be used to establish the importance of the different activities in delivering values and the identification of core and non-core activities.