The Core Competence of the Corporation

The purpose of this article is to show the idea behind the core competence of the corporation and its applicability in its implementation. Core competencies are the collective learning in the organization.  Diversified companies that have dominated in the market have always considered themselves as portfolios of core competencies in order to create a unique, integrated system and technological skills that cannot be copied by the competitors.  The core competencies include articulation of strategic intents and identifying core competencies to support the intent. Core competencies are built when the needed technologies are invested; the resources get to be infused all over the business units and when strategic alliances are forged. One need not to consider business units as a sacrosanct, then identify the projects and people that embody the firm’s core competence and lastly gather the managers who are capable of identifying the next-generation competencies in order to successfully cultivate a core-competency mind-set.

Many companies will only discover ways of prevailing in global competition if only they identify, cultivate and exploit the core competencies that will enhance their growth. Companies should invent new markets, enter new markets with full force and radically modify the patterns of customer’s choices in the already established markets. A company’s competiveness derives from price/performance attributes of current products in the short run and the ability to build at a lower cost than competitors in the long run. To identify core competencies in a company, the core competency must provide a potential access to a wide variety of markets, must make a significant contribution to the customer benefiting from the end product and lastly a core competence should be hard enough to prevent the competitors from copying it. Copy products links core competencies and end products. These are the three planes on which global leadership battles are waged on. SBUs have enabled the companies to understand the new terms of competitive engagement. When fragmentation of core competencies becomes inevitable and fails to transcend SBU lines, a strategic architecture need to be developed in order to establish objectives for a competence building.

This is a very useful article because the author has given a detailed account of the core competencies in brief and how it can be applied. However, examples of multinational companies lacked enough data, graphs and flow charts to show how effective the application of the cores of competence can be. Procedural flow and the uncomplicated language used make the article easy   to understand. I find the article useful and detailed.

Order now

Related essays