The Impact of Core Competencies on Competitive ...

"The Impact of Core Competencies on Competitive Advantages in Istanbul Tourists companies" Daoud Jerab1 Mustafa Alper 2 Atilla Başlar 3 The purpose of this study is to examine the impact of core competencies on competitive advantages and success in Istanbul tourist companies and how to sustain the success of these companies. An empirical study was conducted. Data were collected from 150 successful tourist companies in Istanbul using a survey. Statistical tools were used to test the hypothesis such as: descriptive analysis, spearman correlation, and multiple regressions. The research results indicate that there is a statistical significant relationship between core competencies, competitive advantages and company success. The core competence types with high impact were Strategic Focus and key staff skill, knowledge management systems, company facilities and infrastructure, dynamic capabilities and key work processes, and unique resources respectively. Keywords: Tourism, Core Competence, Competitive Advantage, Company Success

1. Introduction Tourism is vital for many countries, due to the large intake of money for businesses with their goods and services and the opportunity for employment in the service industries associated with tourism. These service industries include transportation services, such as airlines, cruise ships and taxicabs, hospitality services, such as accommodations, including hotels and resorts, and entertainment venues, such as amusement parks, casinos, shopping malls, music venues and theatres. Tourism is defined as travel for recreational, leisure or business purposes. Tourist attraction is a place of interest where tourists visit, typically for its inherent or exhibited cultural value, historical significance, natural or built beauty, or amusement opportunities. Some examples include historical places, monuments, zoos, aquaria, museums and art galleries, botanical gardens, buildings and structures (e.g., castles, libraries, former prisons, skyscrapers, bridges), national parks and forests, theme parks and carnivals, living history museums, ethnic enclave communities, historic trains and cultural events. Many tourist attractions are also landmarks. The attractiveness of tourist sector and a country rank worldwide depends mainly on three factors: (1) Regulatory framework (Policy rules and regulations, Environmental sustainability, Safety and security, Health and hygiene, Prioritization of Travel & Tourism), (2) Business environment and infrastructure (Air transport infrastructure, Ground transport infrastructure, Tourism infrastructure, ICT infrastructure, Price competitiveness in the T&T industry), and (3) Human, cultural, and natural resources (Human resources, Education and training, Availability of qualified labor, Affinity for Travel & Tourism, Natural resources, and Cultural resources). Sustainable tourism is envisaged as leading to management of all resources in such a way that economic, social and aesthetic needs can be fulfilled while maintaining cultural integrity, essential ecological processes, and biological diversity and life support systems. According to World Tourism Organization, in 2009, Turkey occupied the seventh position worldwide in the number of international tourists' arrivals: It was 25.5 million visitors, and in terms of income $21.3 billion. Last year, Istanbul-Turkey was listed in the top 10 most visited cities all over the world; the number of international visitors to Istanbul was estimated 7.51 million. There are thousands of tourist firms working in this sector but very little are successful firms….. In the long run, a company gains a sustainable competitive advantage and success through its ability to develop a set of core competencies that enables it to serve its selected target customers better than its rivals. Core competencies are a unique set of PhD Scholar, Istanbul University, Institute of Social Sciences, Department of Business Management and Organization, Avcılar Campus 34850, Istanbul-Turkey e-mail:[email protected] 1

PhD Scholar, Gebze Institue of Technology (GIT), Institute of Social Sciences, Department of Management, Gebze Yüksek Teknoloji Enstitüsü No:101 41400 Çayırova Gebze/KOCAELİ-Turkey, e-mail: [email protected] 2

PhD Scholar, Istanbul University, Institute of Social Sciences, Department of Business Management and Organization, Avcılar Campus 34850, Istanbul-Turkey e-mail: [email protected] 3

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Electronic copy available at: http://ssrn.com/abstract=1813163

capabilities that a company develops in key areas, such as superior quality, customer service, innovation, team building, flexibility, responsiveness, and others that allow it to leave behind its competitors (Zimmerer and Scarborough, 2005, p.69). The core competence development process enable the organization to pour its growing stream of innovation into the global markets and create new competitive space to stake its capabilities and ahead of the competition. The potential of an organization‘s sustainable competitive advantage depends on the rareness and imitability of its resources and capabilities. The less imitable a competitive advantage is, the more cost disadvantage is faced by the competitor in imitating these competencies (Porter 1985: Value Chain analysis). The purpose of this paper is to investigate the core competencies within the researched companies, and to reveal their impact on achieving competitive advantages and firm success factors and how these companies are thinking to sustain their success?

2. Study Objectives The main purpose of this study is to present the empirical findings for the relationship between core competence, and company success indicators. The study objectives will be: 1. Identification of core competencies within the researched companies. 2. Investigating the impact of core competencies in achieving success in the researched companies. 3. Investigating if competitive advantages act as mediator between core competencies & firm success 4. Investigating how the researched companies think to sustain their success.

3. Literature Review There are a lot studies conducted to this subject worldwide; the following studies are the most relevant to this research paper: The Study of Bani-Hani, 2009: This study examines the impact of core competencies on competitive advantage and it applied on Jordanian insurance organizations. The findings indicated that (1) Core competence dimensions (unique resources, processes, and Knowledge-Based Systems) are provided in high percentages with a mean receptively but the facilities mean are low compared with the expected mean which is three. (2) There is a significant positive relationship between core competencies and competitive advantage from the sample point view. The studies of Kak, (2008 & 2002): These studies were about examining that core competence is an important source of sustained competitive advantage for corporate success and greater is its economic return. The organizational learning, strategic flexibility, effective technology management, and people provide the important sources of core competence. The major findings reveal that ‗competence at the level of technology‘ leads to the generation of sustainable competitive advantage and profitability, while as ‗differentiation‘ and ‗time‘ advantage helps in achieving corporate success in terms of growth.. Study of Raduan, C. R.; Jegak, U.; Haslinda, A. (2009): this study investigate the relationship between organizational resources and the way firms are organized to achieve competitive advantage. The resourcebased view (RBV) has been focusing more on the attributes and characteristics of resources to build competitive advantage. Examining organizational competitive advantage from the resource-based view allows the organization to gauge the magnitude of importance placed upon its internal firm resources, capabilities and systems in their relationship with competitive advantage and performance. Study of Nicole P. Hoffman, 2000: The purpose of this paper is to trace the origins of sustained competitive advantage (SCA) and discuss how it has been applied to marketing strategy. It is organized as follows: First, early contributors are cited and potential sources of SCA are presented. A formal conceptual definition of the construct is given, followed by a discussion of how SCA is linked to other concepts in the strategy field. A theoretical model of how an SCA is achieved in a network setting is offered, and future research opportunities are suggested.

4. Theoretical Framework 2


4.1 Core Competencies The concept of core competencies was popularized by C.K Prahalad and G. Hamel in 1990. They define a core competency is a ―bundle of skills and technologies that enable a company to provide a particular benefit to customers‖. It is the organization's major value-creating skills and capabilities that are shared across multiple product lines or multiple businesses (Hamel and Prahalad, 1990:82). A core competency must be essential to corporate survival, invisible to competitors, difficult to imitate, unique to the corporation, a mix of skills, resources and processes, sustainable over time, greater than the competence of an individual, essential to the development of the core products, essential to the strategic vision and decision of the organization, marketable and commercially valuable, and few in number Tampoe (1994:68). Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value. Core competencies are the collective learning in organizations, and involve how to coordinate diverse production skills and integrate multiple streams of technologies. It is communication, an involvement and a deep commitment to working across organizational boundaries. A core competency can take various forms, including technical/subject matter: know-how, a reliable process and/or close relationships with customers and suppliers. It may also include product development or culture, such as employee dedication. The strategic management classifies core competencies bases by: the resource-based, competence-based, and dynamic capability- based (Sanchez, 2004; Teece et. al., 1997). From the literature the following characteristics of core competencies have been identified: (1) Rare (Barney, 1986:657, 1991:100, 1997:20) (2) Inimitable, lack of transferability and replicable (Barney 1986:657, 1991:100; Dierickx and Cool, 1989:1506; Prahalad and Hamel, 1990:80; Grant, 1991:114; Tampoe,1994:70) (3) Add significantly to the ultimate value of the product or service (Barney, 1986:657, 1991:100, 1997:20; Synder and Ebeling, 1992:27; Grant, 1991:114; Tampoe, 1994:71) (4) Have potential to support multiple products or services (Prahalad and Hamel, 1990:81; Synder and Ebeling, 1992:28) (5) Represent a unique capability that produces long lasting competitive advantage (Synder and Ebeling, 1992:29; Tampoe, 1994:71) (6) Essential to corporate survival (Tampoe, 1994:72) (7) Invisible to competitors (Tampoe, 1994:72) (8) Greater than the competence of an individual (Tampoe, 1994:72) (9) Essential to the strategic vision and decisions of the organization (Tampoe, 1994:73) (10) There are a limited number within each organization (Tampoe, 1994:73) (11) Durable (Grant, 1991:115) (12) Manifest differently in organizations (Turner and Crawford, 1991:75) To identify core competencies in a particular company, ask questions such as ―why is the customer willing to pay more or less for products or service from one company over another?‖ Core Competencies should change in response to changes in the company's environment. They are flexible and evolve over time. As a business evolves and adapts to new circumstances and opportunities, so its core competencies will have to adapt and change. An organizational core competency is an organization's strategic strength. It is what the organization does best and what it should never outsource. After the literature review, the core competences sources can be: 4.1.1. Unique Resources: Resources represent inputs into a firm‘s production process, by themselves; resources do not create a strategic advantage for the firm. Resources are the source of a firm‘s capabilities. Resources represent inputs into a firm‘s production process such as capital equipment, skills of employees, brand names, finances and talented managers. They are divided to two types: (1.1)Tangible Resources: it includes Natural resources, Infrastructure, Facilities and physical resources Financial resources, and Human Resources and skills of employees. (1.2) Intangible Resources: Non-Physical resources such as Heritage and Culture , Technological, Innovation, Special events and Reputation: (Proprietary know-how (Knowledge), Capacity for ideas creation and innovation, Installed customer base, Trust between managers and employees, Reputation of the firm, Patents and trademarks, Brand equity, How it interacts with people and talented managers (Lu & Sohal 1993, Porter &Parker 1993, Black & Porter 1995). 4.1.2. Dynamic Capabilities: Capabilities are the firm's ability to utilize its resources effectively. Dynamic Capabilities enable the firm to quickly respond to change and deploy resources accordingly purposely integrated to achieve a desired end state (Dosi, G. et al, 2001). 4.1.3. Institutional Facilities (infrastructure): They include both physical assets such as highly specialized buildings and equipment, as well as non-physical "systems" such as the body of rules and regulations governing companies such as: the administrative, financial, and human resource systems, by which highly skilled and specialized professionals are employed, trained, disciplined and advance in their careers. Business travel and tourism infrastructure, including both man-made and natural attractions, convention centers, hotels,

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restaurants and other services that cater mainly to tourists and business travelers, as well as the systems for informing and attracting tourists, travel insurance, etc … Bani-Hani, (2009), Davenport et al. (1998), Liebowitz (1999), Wong and Aspinwall (2005), Akhavan et al. (2006), Akhavan and Jafari (2006), Jafari et al. (2007),du Plessis (2007).

4.1.4. Knowledge Management Systems: Knowledge Management System refers to generally IT based system for managing knowledge in organizations for supporting creation, capture, storage and dissemination of information. The idea of a KM system is to enable employees to have ready access to the organization's documented base of facts, sources of information, and solutions. Sharing this information organization wide can lead to more effective engine design and it could also lead to ideas for new or improved equipment. It comprises a range of strategies and practices used in an organization to identify, create, represent, distribute, and enable adoption of insights and experiences. Knowledge Management System as a source of core competence can be expressed as the capability to absorb new technology and in-house technology development. Skyrme and Amidon (1997), Davenport et al. (1998), Liebowitz (1999), (APQC) (1999), Zack (1999), Wong and Aspinwall (2005), Akhavan et al. (2006),Bozbura (2007),du Plessis (2007). The capability to absorb new technology can includes of employee training, forecasting, innovation and technological needs satisfaction. And in-house technology development can includes development of people abilities, product development, futuristic technological methods, and customer focus satisfaction. In addition to how to integrate the multiple streams of technologies together in the production process. The creation of knowledge is a dynamic and continuous process involving interactions at various organizational levels. Organizations must learn from their environment how to survive and produce competitive condition that shapes the character of success. Every organization is a victim of its own success, Alavi & Leidner,(1999). Skyrme and Amidon (1997), Davenport et al. (1998), (APQC) (1999), Alavi and Leidner (2001), hung et al. (2005), Wong and Aspinwall (2005), Akhavan et al. (2006), Akhavan and Jafari (2006), Chong (2006),du Plessis (2007)

4.1.5. Key Work Processes: A process is any operation through which a set of inputs go through one or more steps resulting in a more valuable set of outputs. A process can be viewed as a series of interrelated operations, which add value to its inputs resulting in outputs that are more valuable (Encyclopedia of Business). A process comprises of a set of partially ordered steps intended to achieve the desired output. These steps may be called operations. Sometimes these steps are also referred to as processes themselves, and a process is viewed as a set of partially ordered processes. It is important to note that alternative processes can substitute processes. Competitive success depends on transforming a company‘s key processes into strategic capabilities that consistently provide superior value to the customer (Stalk, Evans & Shulman, 1992). Skyrme and Amidon (1997), Davenport et al. (1998), Holsapple and Joshi (2000), Bhatt (2000), Wong and Aspinwall (2005), Akhavan and Jafari (2006) Juran 1974, Crosby 1979, Feigen- Baum 1983, Deming 1986, Garvin 1987, Saraph et. al. 1989, Lu & Sohal 1993, Porter &Parker 1993, Motwani et. al. and Powel 1995

4.1.6. Key staff skills: Hamel and Prahalad (1994) define core competence as a bundle of skills and technologies. A skill is defined as the learned capacity to carry out pre-determined results often with the minimum outlay of time, energy, or both. Skills can often be divided into technical skills, functional skills, self-management skills in addition to important personal attributes (hard-working, trustworthy, resultsoriented, and decisive). Employees with good problem solving skills that enables them to identify, remedy and resolve business problems. It would be an added value to the company having employees with entrepreneurship skills such as ability to think critically, analyze situations and be able to identify business opportunity. Competence at the level of people is an underlying characteristic which enables them to deliver superior performance in the given job, role or situation. Organizations can improve their overall productivity by shifting people from average to superior performance through development and by promoting right people. A company that wants to increase its market share by getting more from its current employees and hiring the best from outside market will gain a great deal of superior performance. The right people are the most important assets and are the source of competitive advantage. The successful organizations of the future will be those, which understand the link between their business results and people (Boulter, Dalziel and Hill, 1996). Individuals in the organization are valuable resources as they generate ideas and turn them into actions (Schon, 1983). The super problem solving, creativity and learning talents of people will become the critical skills of 21st century (Makridakis 1989). 4.1.7. Strategic Focus: Strategic Focus is a long-term goal that is ambitious, builds upon and stretches firm‘s core competencies, and draws from all levels of the organization. It requires the firm to concentrate on a narrow, exclusive competitive segment (market niche), hoping to achieve a local rather than industry wide competitive advantage. Gary Hamel and C. K. Prahalad declared that strategy needs to be more active and interactive; less ―arm-chair planning‖ was needed. They introduced terms like strategic intent and strategic architecture. Their most well known advance was the idea of core competency. They showed how

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important it was to know the one or two key things that your company does better than the competition. Strategic Intent is described as a way of creating an obsession with winning at all levels and across all functions of the organization. It is a shared competitive agenda for global leadership. Strategic Intent uses stretch targets to create competitive advantage. A strategic architecture is a framework or map for leveraging corporate resources towards the strategic intent. It draws upon a wide variety of information to present a view of the evolution of an industry. A strategic architecture identifies the core competencies to build and their constituent technologies. It provides a framework within which innovation can be planned and managed. It is the role of senior management to develop the organization in a way which closes the gap between ambition and ability. Market orientation is an intangible resource which involves a dual focus on both customers and competitors and can contribute to sustainable competitive advantage. The provision of customer value is a source of sustainable competitive advantage; customers‘ desired value changes, firms should monitor these changes via continuous learning about customers (Gary Hamel and C. K. Prahalad, 1990).

4.2 Company Success indicators A competitive advantage is an advantage gained over competitors by offering consumers greater value and superior profits for itself. It is created by using resources and capabilities to achieve either a lower cost structure or a differentiated product. Competitive advantage is at the heart of firm's performance. It is concerned with the interplay between the types of competitive advantage, i.e., cost, differentiation and time, and the scope of the firm‘s activities . (Porter 1985). Resources, skills, capabilities, and core competencies are the elements that make up the foundation of competitive advantage. Resources are the source of a firm‘s capabilities. Capabilities in turn are the source of a firm‘s core competencies, which are the basis of competitive advantages. Performance measurement and indicators were searched by Davenport et al. (1998), (APQC) (1999), Holsapple and Joshi (2000), Hassanali (2002), Hung et al. (2005), Wong and Aspinwall (2005), Chong (2006),du Plessis (2007. Michael Porter (1985), he introduced the idea 5 forces analysis, generic strategies, the value chain

analysis, strategic groups, and clusters. The "value chain" is the basic tool for analyzing the sources of competitive advantages. To gain a competitive advantage he suggested four "generic" business strategies (Advantages) that could be adopted: cost advantage, differentiation advantage, and a broad or narrow focus. Detailed below: 4.2.1. Cost leadership Advantage – Its target is to be the lowest-cost producer in the industry. Cost advantage occurs when a firm delivers the same services as its competitors but at a lower cost. An example of cost leadership is Nissan and Dell Company. 4.2.2. Differentiation Advantage - Differentiation advantage occurs when a firm delivers extra value-added features or greater services giving customers clear reasons to prefer one product over other nevertheless of competitor's price. They are collectively known as positional advantages because they denote the firm's position in its industry as a leader in either superior services or cost. An example of Differentiation Strategy is Mercedes. 4.2.3. Time Advantage: The competitive advantage in terms of time can be expressed as leading or lacking the market ‗market leadership‘ and quick adaptation to the changing environment. (www.wikipedia.org/wiki/First-mover_advantage).

Company performance has a lot of indicators, but the most important indicators are: 4.2.4. Profitability: Profitability is the result of deducting all expense and taxes from revenue; but in term of economic Profitability occur when revenue exceeds the opportunity cost of inputs, noting that these costs include the cost of equity capital that is met by normal profits. If a firm is making an economic loss (its economic profit is negative), it follows that all costs are not being met in full, and the firm would do better to leave the industry in the long run. In terms of the wider economy, economic profit indicates that resources are being in useful endeavours, whilst economic losses indicate that those resources would be better employed elsewhere (www.businessdictionary.com). 4.2.5. Growth: Growth is defined as companies that consistently experience above-average increases in sales and earnings. Financial theorists define a growth company as one with management and opportunities that

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yield rates of return greater than the firm‘s required rate of return. And a growth stock means that it has a higher rate of return than other stocks with similar risk (www.businessdictionary.com). 4.2.6. Sustainability: Sustainability is the capacity to endure. Sustainable business, is enterprise that has no negative impact on the global or local environment, community, society, or economy—a business that strives to meet the triple bottom line. Often, sustainable businesses have progressive environmental and human rights policies (www.wikipedia.org /wiki/Sustainability).

4.3 Competitive Advantage as Mediator A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competing products (differentiation advantage). For that competitive advantage plays a significant mediating role in the relationship between organizational resources, capabilities, systems, … and performance results (Prahalad and Hamel, 1990; Barney, 1991; Mascarenhas et al., 1998; Fahy, 2000; Ma, 2000; Gimenez and Ventura, 2002; Morgan et al., 2004; Sirmon et al., 2007).

5. Study Questions and Hypothesis 5.1. Study Questions This study is concerned with answering the following main questions: 1. What are the core competencies within the researched companies? 2. What is the impact of core competencies on company different success elements 3. Is competitive advantages act as mediator between core competencies & firm success? 4. How the researched companies think to sustain their success? 5.2. Study Model

5.3. Study Hypotheses: The main and sub-hypothesis are: H1: There is insignificant effect of organizational core competencies dimensions on company success. H1.1 There is insignificant effect of organizational unique resources on company success at =0.05. H1.2 There is insignificant effect of organizational dynamic capabilities on company success at =0.05. H1.3 There is insignificant effect of organizational facilities on company success at =0.05. H1.4 There is insignificant effect of organizational knowledge systems on company success at =0.05. H1.5 There is insignificant effect of organizational key working processes on company success at =0.05. H1.6 There is insignificant effect of organizational key staff skills on company success at =0.05. H1.7 There is insignificant effect of organizational strategic focus on company success at =0.05. H2: There is insignificant effect of organizational core competencies on company success dimensions. H2.1 There is insignificant effect of organizational core competencies on cost leadership advantage at =0.05. H2.2 There is insignificant effect of organizational core competencies on differentiation advantage at =0.05. H2.3 There is insignificant effect of organizational core competencies on time advantage at =0.05. H2.4 There is insignificant effect of organizational core competencies on profitability at =0.05.

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H2.5 There is insignificant effect of organizational core competencies on growth at =0.05. H2.6 There is insignificant effect of organizational core competencies on sustainability at =0.05. H3. If there is effect of organizational core competencies on company success, this effect will be mediated by competitive advantage.

6. Methodology After literature review was conducted, a quantitative approach was used in this study to find out the answers for the research questions and testing the hypotheses. 6.1. Population & Sample: The target population of this study comprised all famous (best or biggest) tourist companies in Istanbul. A clustered Non-random sample of 150 successful firms was used which can be classified as the best in its segment in the tourism sector, ―taking in consideration that the best companies in a sector can‘t be 385 company and can‘t be also random sample (The Best Companies like top ten or top 20, and so on)‖. Our sample consist of 40 hotels, 40 travel agents, 20 transportation companies and the rest were from the best restaurants and others. 6.2. Data Collection: Secondary data was collected based on the findings of published papers, articles, books, prior studies, and the World Wide Web. The primary data collection was carried out using a mixture of self-designed questions and qualifying other questions from the survey of Kak Anjana, 2008, (Empirically Testing the Relationships between Core Competence, Competitive Advantage, and Competitiveness). This instrument comprises three sections: The first section covers the demographic information (Sex, Age, Education, Experience, and Current Position). The second section contains (22) items measuring core competency, the third section measures competitive advantage through (34) items also, and the fourth section contains (14) items measuring company success. Five Likert-type scales were used to score the responses. 6.3. Instrument Validity and Reliability: To ensure the face validity of the instrument tool, it was given to five expert referees from Istanbul universities. The referees displayed their constructive comments and suggestions, which were taken into consideration. The reliability of data collected instrument was measured using Cronbach's alpha coefficient; the reliability test was conducted to check for inter-item correlation in each of the variables in the questionnaire. The closer Cronbach's alpha is to one, the higher the internal consistency reliability (Sekaran,2003). The test results are as follows: Cronbach's alpha = 0.818, which approached to the acceptable limit. 6.4. Data Analysis Methods: Statistical Package for Social Sciences (SPSS) was used to analyze the data. Descriptive techniques such as; frequencies, percentages, means, standard deviation (Std.) and coefficient of variation (CV) were used to describe the variables. Spearman correlation and multivariate and univariate regression analysis were used to test hypothesis of the study.

7. Statistics Analysis and Hypothesis Testing 7.1.1 Descriptive Results: The mean, standard deviation, and coefficient of variation (CV) of the study questions related core competencies (independent variable) and the competitive advantage (dependent variable) are summarized in Descriptive Statistics table (7.1).The coefficient of variation is a relative measure of the dispersion of data points around the mean. It is calculated as the percentage ratio of the standard deviation divided by the mean. When the standard deviation and mean come from repeated measurements of a single subject, the resulting coefficient of variation is an important measure of reliability.

Table (7.1.a) The Measures of Descriptive Statistics of the Study Variables

Item

Mean

Std. Deviation

Variance

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CV

Skewness

Kurtosis

3.62 3.73 3.75 3.76 3.73 3.92 3.89

Unique Resources Dynamic Capabilities Company Facilities Knowledge Systems Key Working Processes Key Staff Skills Strategic Focus

0.81 0.80 0.75 0.81 0.72 0.82 0.89

0.66 0.64 0.56 0.65 0.51 0.66 0.80

0.22 0.21 0.20 0.21 0.19 0.20 0.22

-0.67 -0.53 -0.48 -0.55 -0.49 -0.55 -0.88

0.60 -0.32 0.00 -0.30 -0.24 1.50 0.39

Examination of the mean value listed in Table (7.1) of Descriptive Statistics reveals that the most important core competencies were: Management skill & focus (3.92) Knowledge Systems (3.76), Facilities (3.75), Capabilities and Processes (3.73). The less important items were: and Unique Resources (3.62).. The standard deviation lies between (0.72 - 0.82), while the coefficient of variation lies between (0.19-0.22). As it is shown in Table (7.1.a): Skewness and Kurtosis values show that the distribution of data is normal for core competence elements and that means that it is possible to proceed in test the hypothesizes. Table (7.1.b) The Measures of Descriptive Statistics of the Study Variables

Item Differentiation Advantage Cost Leadership Advantage Time Advantage Profit Growth sustainability

Mean 3.71 3.89 3.70 3.91 3.88 4.24

Std. Deviation 0.46 0.42 0.63 0.85 0.81 0.31

Variance 0.21 0.17 0.40 0.71 0.66 0.09

CV 0.12 0.11 0.17 0.22 0.21 0.07

Skewness -0.10 -0.53 -0.21 -0.61 -1.43 -0.19

Kurtosis -0.50 0.09 -0.48 -0.21 1.70 0.09

Examination of the mean value listed in Table (7.1) of Descriptive Statistics reveals that the most important company success indicators were: Sustainability (4.24); Profit (3.91); Cost Leadership Advantage (3.89), Growth (3.88), Differentiation Advantage (3.71), and Time Advantage (3.70). The standard deviation lies between (0.31 - 0.85), while the coefficient of variation lies between (0.07-0.22). ). As it is shown in Table (7.1.b) also Skewness and Kurtosis values show that the distribution is normal of company success indicators.

7.1.2 Factor Analysis Results The Kaiser-Meyer-Olkin (KMO) was 0.748 which means the sample is adequate. Bartlett's test of sphericity tests value 1388.89, significant (0.000) at degrees of freedom 231. Since Sig.