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Assessing Business Capability Market Differentiation and Maturity
Assessing Business Capability Market Differentiation and Maturity

Learn which questions to ask as you build your market differentiation into the business capability model.

Jon Scott avatar
Written by Jon Scott
Updated over a week ago

In the business capability modeling journey, we introduce the field Market Differentiation. Here, we want to understand what the business does that is central to its service provision, competitiveness in its market, and how it is the same as its competitors. This information is useful in seeing where improvements can be made, without spending time and money on a capability with no strategic advantage.

It is also important to note that market differentiation does not equate to necessary. A company might need a capability to do something, making that capability necessary, but just because it is needed does not mean that the capability is differentiating. For a sales organization, for example, a Customer Relationship Management (CRM) capability might be critical to run, but CRM has been heavily commoditized, so it is not necessarily differentiating.

Marketing Differentiation Field Values

To what extent does the capability provide your organization with a competitive advantage in one or more markets?

  1. Commodity: The capability provides no competitive or market advantage and can be provided or consumed as a standardized service

    1. i.e. “everybody does this the same - there’s no advantage in reinventing the wheel”

  2. Market-adapted: The capability may be adapted to provide a marginal market advantage

    1. i.e. “we can adapt to market requirements but the difference to our performance is small.”

  3. Market-competitive: The capability is tailored to meet the upper norms or expectations of a market

    1. i.e. “investing in this capability makes us a credible player.”

  4. Market-leading: The capability is optimized to provide a competitive advantage against competitors with similar capabilities

    1. i.e. “if we do this better than our competitors we outperform them.”

  5. Market-disruptive: The capability provides a decisive competitive advantage through being unique, innovative or not reproduced by competitors

    1. i.e. “if we can do this and our competitors can’t, we change the game.”

Market Differentiation can be established without having your capabilities mapped to technology, but expect these values to change as more mapping happens.

Another field in the business capability realization journey is Maturity. The intent of this field is to assess how capabilities are delivered in the organization, helping you see where there need to be improvements. You want to avoid having a differentiating capability with low maturity, as that puts the capability at risk.

Maturity Field Values

To what extent are the processes, departments, systems, and skills that realize this capability complete, reproducible, and adaptive?

  1. No Capability: Your organization has no systems, processes, or skills to realize this capability.

  2. Limited Capability: Your organization has processes, systems, or skills to realize this capability but they are immature or hard-to-reproduce.

  3. Developing Capability: Your organization has stable or reproducible processes, processes, or skills to realize this capability although they are not yet efficient.

  4. Mature Capability: Your organization has stable, reproducible, and performance-managed processes, systems, or skills to realize this capability.

  5. Optimized Capability: Your organization has reproducible, efficient, and continuously adaptive processes, processes, or skills to realize this capability.

We introduce this field so you can see what enables your capabilities, making it easier to gauge the maturity of the capability after mapping.

These two values plus complexity (a calculated field) and cost often go hand-in-hand when assessing a capabilities performance or level of investing. These four fields will show you the most important things that your business does, how much is spent, how it is done, what needs to be improved, and how complicated improvements would be.

In the example below, we see there is a Marketing Promotion capability that has a high market differentiation. This differentiating capability might be delivered in an ad-hoc fashion, so it's marked lower on the maturity scale. The size of the bubbles in this example reflects the complexity, easily showing where the opportunities lie.

ardoq capability

Where the Data Comes From

While the capability experts are meant to populate these fields, this really can’t be done without your business stakeholders. Experts should be first to assume the values before those values are validated with the business. The business won’t understand enough to populate empty values but should have a good idea coming from the Expert baseline.

Making Changes

While these fields and their values are great, you might find that your organization has a different way of labeling. Ardoq’s flexible model allows for these fields to be changed to fit your organization. If you want to change them, be aware that these fields and values are tied to some prebuilt assets (presentations, dashboards, surveys, perspectives/filters) and those assets would need to be updated accordingly.

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