How do core capabilities differ from distinctive competencies?

Core capabilities and distinctive competencies are both important concepts in understanding a firm's strategic advantages, but they serve different functions in a company's competitive landscape.

Core capabilities refer to the fundamental strengths and abilities that a company possesses, which allow it to carry out its operations effectively and efficiently. This competence can include a company's processes, technologies, and know-how that contribute to its overall performance. The option selected (C) rightly highlights that core capabilities often determine a firm's efficiency in turning inputs into outputs, showcasing a company’s ability to manage resources and operations effectively.

While efficiency is a hallmark of core capabilities, distinctive competencies go a step further by being the unique strengths that set a company apart from its competitors. These competencies are difficult to replicate and provide a competitive edge in the marketplace. Thus, a strong distinctive competency might stem from an organization's core capabilities but is characterized by its uniqueness and the value it adds to the firm’s offerings.

In this context, although the other choices offer valid points about characteristics of core capabilities, none capture the specific relationship of efficiency and outputs as effectively as the chosen option does. Options discussing visibility or maintenance of capabilities address aspects that, while relevant, do not directly encapsulate the fundamental role of core capabilities in operational efficiency.