1.1.2 Current Approach to competitive advantage at Amana Takaful
There are likely many contributing factors that influence a firm 's competitive position and it is likely a combination of many VRIN resources and capabilities that will determine the type of company product or service differentiation. As narrated by porter in his theory of porter’s generic competitive strategies (Appendix 1) there are 2 basic types of CA a firm can possess. Amana adopts a hybrid strategy; these ‘hybrid’ strategies are the ones which combine low cost and differentiation elements (Gopala Krishna & Subramanian, 2001; Proff, 2000). By this, they seek to achieve differentiation and low cost simultaneously. The combination of the strategies help Amana to adapt quickly
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As the core competencies of Amana Takaful were identified in task 1.1, the non-specialization areas of the organization would be identified in this task in order to make the decision of outsourcing.
Outsourcing can be defined as a strategy by which an organization contracts out major functions to specialized and efficient service providers, who become valued business partners (Handfiled, 2006). The reason that most companies make the outsourcing decision is to substantially leverage resources by:
• Identifying a few core competencies of significance from which company can gain CA
• Focusing investments and management attention on those core competencies
• Outsource other activities which are not the best of their
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For the reason that outsourcing is the delegation of intensive business processes to an external provider or a third party, that, in turn, owns and manages based on defined performance criteria; it is important to cope interactions to strategically manage processes.
For Amana Takaful, in this context, third parties would generally include vendors, partners, affiliates, brokers, agents, distributors and resellers. By understanding the connection points, Amana could make sure to take measures that the business and its operations are secure and sustainable at a holistic and bi lateral partnership