STRATEGIC CAPABILITIES

A Report on Strategic Capabilities of Kärcher

[Instructor name]

Table of Contents

Introduction1

Strategic organisational capabilities at Kärcher2

Strategic capabilities and competitive advantage2

Determining the strategic capabilities of Kärcher3

Value Chain (or Network) analysis4

Activity maps7

Benchmarking7

SWOT analysis8

Achievement of sustainable competitive advantage10

Sustainable competitive advantage of Kärcher10

Strategic capabilities providing sustainable competitive advantage11

Organisational structure and strategic capabilities12

Organisational structure12

Organisational dynamics13

The affect of organisational structure on strategic capabilities15

Conclusions and recommendations16

References20

Introduction

The company was started by Alfred Kärcher who was an innovator and an entrepreneur. He started working at his father's business in 1924 when he was only 23 years old. Later, he started his own business and also got a patent for his first product. Later on, in 1950, the company for the first time introduced the cleaning technology products, which laid the foundation for the today's Kärcher business of providing cleaning technologies in its various products. The first cleaning product was the hot water cleaner washer.

The company started its internationalisation spree in 1962 with the opening of its first subsidiary in France. This was followed by more factories in Austria and Switzerland. Today, the company is operating in more than 41 countries and is generating more than 85% of its revenues from foreign countries. The company also has about 40,000 service centres which provide services in more than 190 countries worldwide.

The company took to innovation in 1974. Then, the company diversified into numerous high-technology cleaning products. These products included both specialised cleaning and general cleaning products. The company also provided waste water treatment plants. This marked the beginning of the innovation philosophy of the company.

Today, Kärcher is providing both consumer and industrial cleaning products. These segments have been divided as home and garden and professional .The specific cleaning products in the household category include pressure washers, washing ranges, vacuums, steam cleaners, floor polishers, sweepers, window vacs, pumps, chassis cleaners, and accessories. The professional customer segment includes products such as high-pressure cleaners, vacuums, carpet cleaners, spray-extraction cleaners, steam cleaners, air blowers, scrubber driers, sweepers and vacuum sweepers, snow throwers, industrial cleaning systems, vehicle cleaning systems, and related accessories (Kärcher, 2012).

Today, the company stands as one of the top companies of the world in cleaning products with sales revenues reaching €1.7 billion. The company sold about 8.25 million units in 2011. The company's strength has been stated as originating from innovative and sustainable products. The company introduced more than 100 new products in the previous year which included eco-efficient products that conserve energy use. The company is also greatly socially responsible and participates in various social corporate responsibility programmes such as the SoS (Save our Souls) and UN Global Corporate Network (Kärcher, 2012).

Strategic organisational capabilities at Kärcher

Strategic capabilities and competitive advantage

It is clear any organisation or business will get a competitive advantage with its core competencies. These core competencies represent certain processes and activities of the business in which it has a competitive edge. These are those processes which can be looked at from the view of the resource-based theory. The resource-based theory suggests that only those competencies of the organisation are its ...