Final answer:
A company is said to have a distinctive competence when it excels at a particular important activity compared to its rivals. Core competencies allow companies to focus on a few products or services they can deliver exceptionally well, leading to a competitive advantage. This concept is also reflected in the economic principle of countries gaining from trade by focusing on areas where they have a comparative advantage.
Step-by-step explanation:
When a company performs a particular competitively important activity in a way that is superior to its rivals, it is said to have a distinctive competence. This concept relates closely to the focus on core competencies, which are the specific sets of skills, knowledge, and experience that a company excels at and which give it a competitive edge. These core competencies are fundamental to the company's ability to succeed in the marketplace, as they can produce specific products or services both efficiently and effectively, leveraging their expertise to maintain a competitive advantage.
A common pattern in the business world shows that companies concentrating on their core competencies tend to be more successful. They focus on a limited range of products or services that they can deliver exceptionally well, rather than diluting their efforts across an array of offerings with varying levels of quality and efficiency. This strategic focus aligns with another economic principle, where countries that specialize in products for which they have a comparative advantage — meaning they can produce at a relatively lower opportunity cost than other countries — tend to gain from trade.