1) The four competences that Papa John International possesses are; operating system, cost

management, marketing, and brand image. It should be noted that all of these four factors are

capabilities that that Papa John International (PJI) can utilize cross-functionally over all its

divisions, and hence these are at least competencies. It should be noted that all of these are

different type of competence because they rank differently according to the VRIO framework.

The operating system of PJI is a competence because it can be utilized throughout the geographic

divisions. Moreover, it should be noted that the availability of such a system ensures a consistent

quality in PJI’s food taste and quality hence provides customer value. Moreover, this operating

system is unique to PJI and competitors do not possess it simply because doing so would require

a complete restructuring of competitor’s operations. As a restructuring would be quite expensive

and in due process also liable to affect ongoing operations, the operating system is not imitable.

It should also be noted that PJI is specifically developed around this operating system. In other

words, it might be realized that the operating system competency answers yes to all of the factors

in the VRIO framework, and hence the operating system is both a core and distinctive

competence.

However, besides the operating system, the other three are not distinctive competencies;

albeit still core competencies. The reason for this is that they are valuable strengths that are

utilized across the company; however, they do not answer all four aspects of the VRIO

framework with a definitive yes. The cost management and marketing function of PJI is a core

competence as it used throughout the organization and it significantly provides value to customer

in the form of improved operations. It should also be noted that much of PJI is organized in a

manner so that cost management can be availed throughout the company. However, it should be

noted that the cost management isn’t something rare and is quite imitable in general. Moreover,

it cannot be definitively stated that it is better than its competitors cost management or the

industry, and hence cost management and marketing are core competencies but not distinctive

one.

The image of PJI does classify as both – distinctive and core competency – however, this

classification is not as rigid as that of its operating system. The brand image of PJI definitely

provides value to its customers through making the customer feel that he is consuming a better

product. Moreover, it may be said that this is not imitable and quite rare in the pizza industry.

Chain pizza brands do not tend to generate such premium perception towards them, and hence it

is quite unique when Papa Johns is able to create such reactions. However, the brand image is

classified weakly as a distinctive competence, specifically because the organization utilizes this

competence holistically. Nevertheless, for these reasons and above, the four capabilities and

resources discussed are competencies.

2) The sustainability of a competence or an advantage is dependent upon two essential factors;

durability and imitability. Durability is “the rate at which a firm’s underlying resources,

capabilities, or core competencies depreciate or become obsolete”. General core competencies

are made obsolete or their value is lessened when better technology or methods are realized by

competitors or in the industry, in general. On the other hand, imitability is “the rate at which a

firm’s underlying resources, capabilities, or core competencies can be duplicated by others”.

Imitability depends on various factors, the most important of which are transparency,

transferability and replicability.

Taking into account the previously realized competencies, different realizations as to

their sustainability might be made. The operating system of PJI is quite durable. This is because

no technological advancement in pizza-making has reduced the expense of capital and labor

required for the process. Either both or one cost has to be borne. However, the operating system

significantly reduces these costs through centralized dough-making and ingredient preparation.

Moreover, it should be noted that imitation would also prove to be difficult. Transparency of the

operating system isn’t quite there and there are possibly several trade secrets or patented

processes that guard the operating system’s exact nature. It should also be noted that

transferability of the competence is difficult as to build something similar means to reduce

capital and labor costs, however, this cannot be done by copying PJI’s operating model and

which subsequently cannot be achieved because of immense financial and restructuring costs

required. For this same reason, the operating system competency is also not replicable. Hence,

the operating system competence is quite sustainable and might be classified as a slow-cycle

resource as per the continuum of sustainability.

If we consider the other three competence, it should be realized that all three are rather

less sustainable and more of fast-cycle resources. The reason is they lack in both aspects of

durability and imitability. The brand image is not durable as it can easily be made obsolete for a

number of reasons. Similarly, the marketing prowess and cost management are a function each

pizzeria chain has and with time each chain will only try to make these functions more efficient

and PJI’s strength in these functions would depreciate. It should also be noted that all of these

competencies are quite imitable. There is nothing secretive about these competencies and most

information can be attained by briefly studying PJI’s annual reports and daily operations.

Moreover, there are no financial constraints with respect to imitability. It should be noted herein

that the brand image aspect might be harder to imitate as it ultimately depends on the customers;

still it can imitated rather easily. As such, the sustainability of these competencies isn’t much.