...The Core Competence of the Corporation by C.K. Prahalad and Gary Hamel Included with this full-text Harvard Business Review article: 1 Article Summary The Idea in Brief—the core idea The Idea in Practice—putting the idea to work 2 The Core Competence of the Corporation 15 Further Reading A list of related materials, with annotations to guide further exploration of the article’s ideas and applications Product 6528 The Core Competence of the Corporation The Idea in Brief The Idea in Practice Diversified giant NEC competed in seemingly disparate businesses—semiconductors, telecommunications, computing, and consumer electronics—and dominated them all. CLARIFY CORE COMPETENCIES How? It considered itself not a collection of strategic business units, but a portfolio of core competencies—the company’s collective knowledge about how to coordinate diverse production skills and technologies. COPYRIGHT © 2003 HARVARD BUSINESS SCHOOL PUBLISHING CORPORATION. ALL RIGHTS RESERVED. NEC used its core competencies to achieve what most companies only attempt: Invent new markets, exploit emerging ones, delight customers with products they hadn’t even imagined—but definitely needed. Think of a diversified company as a tree: the trunk and major limbs as core products, smaller branches as business units, leaves and fruit as end products. Nourishing and stabilizing everything is the root system: core competencies. Focusing on core competencies creates ...
Words: 9569 - Pages: 39
...and Planning | Assignment # 2 | Umaima Jalal, ID # 6571 | CONCEPTS * Core Competencies: Collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies. * Core competence is about harmonizing streams of technology, it is also about the organizational work and the delivery of value. * Core competence is communication, involvement, and a deep commitment to working across organizational boundaries. It involves many levels of people and all functions. * Core competence does not diminish with use; they are enhanced as they are applied and shared. But competencies still need to be nurtured and protected. * Competencies are glue that binds existing businesses. They are also the engine for new business development. * Core Products: Tangible link between indentified core competencies and end products- the physical embodiments of one or more core competencies. Components or subassemblies that actually contribute to the value of the end product. E.g. compressor in a refrigerator. * Original equipment manufacturer (OEM): manufactures products or components that are purchased by a company and retailed under the purchasing company's brand name. OEM refers to the company that originally manufactured the product * Strategic Architecture: Road map of the future that identifies which core competencies to build and their constituent technologies. * Dramatically reduces the...
Words: 1665 - Pages: 7
...WORD COUNT: 1083 WORD COUNT: 1083 The Core Competence of the Corporation c.k prahalad and gary hamel (1990) A Critical analysis The Core Competence of the Corporation c.k prahalad and gary hamel (1990) A Critical analysis Business Strategy MAN3079 Introduction There are two different drivers of strategy for a firm with one being the organisation itself and the other being the environment. “The Core Competence of the Corporation” argues the case for the organisation itself and so the article is placed in the wider debate of the resource based view (RBV) strategy versus positioning strategy. The two different strategies will explained briefly and then the view of the article itself will be evaluated. The Resource-Based View vs. the Positioning View RBV The examples of resources of a firm mentioned by Wernerfelt include “brand names, in house knowledge of technology, employment of skilled personnel, trade contacts, machinery”. These resources provide a competitive advantage against the competitors through resource position barriers which “affects the costs and/ or revenues of later acquirers adversely”. One of the barriers mentioned by Wernerfelt is the technological lead of one firm over another. This results in higher returns as the firm creates more advanced ideas to stay ahead of the competition. The lead can be maintained by using “high current returns to feed R & D” so that the firm constantly stays ahead of rivals (Wernerfelt, 1984). A summary...
Words: 1298 - Pages: 6
...JOURNAL FOR SESSION 3 AND 4 A major area of research in strategic management is understanding the sources of sustained competitive advantage of a firm. To develop the strategy we need to analyze the firm’s internal strength and weaknesses (resource based model) as well as the external opportunities and the threat(environmental models). Environmental model is based on heterogeneity and mobility of the resources and assumes that all firms have the same strategy and the resources are heterogenic and mobile so the competitive advantage are not long lasting. Where as resource based model states that resources are immobile as well as heterogenic and can have long lasting competitive advantage. Firm resources are categorized into three types – physical capital resources, human capital resources and organizational capital resources. Some of the attributes of this resources can be used for developing strategies for increasing the effectiveness and efficiency of a firm. We need to specify conditions under which we can select resources which can be used as an competitive advantage. Competitive advantage means that a firm as a value added strategy over others and competitive advantage can only be sustainable if the other firms cannot duplicate that strategy. Once the strategy is being duplicate depending upon the strategy of the competitors or due to change in economic condition it is not longer sustainable. In an industry where firms have similar resources I,e resources are...
Words: 1452 - Pages: 6
...Executive Summary This report provides an analysis and evaluation of Triple Bottom Line (TBL) accounting. Many corporations adopt and follow the novel term, along with the public increasing public concern of social and environmental performances. The research pays attention to the arguments for and against the TBL accounting in corporate accounting reporting. Many companies concur with the significance of concept to reinforce their business, yet others hold the view that TBL is accompanied by diverse debates. The findings of this review show that TBL accounting: • Refers to a good tool of the measurement of accountability and transparency • Provides a beneficial opportunity to obtain the value of a corporate name and the market share in completion • Contributes to the reduction of production cost and the conservation of environment through making use of resources efficiently • Improves corporate management and employee productivity due to the measurement of accountability and transparency • Impacts on a core competency of business and a social situation • Adjusts a methodology to measure social and environmental performances TBL accounting with economic, social, environmental activities has been some negative thus far. However, the arguments against TBL accounting, which are related to core competency, poor societies and measure standard, are still doubtful and cannot address a strong persuasive in opposition to its...
Words: 2530 - Pages: 11
...Product Quality Design Achievement 1 Product Quality Design Achievement: Evaluating Quality Approaches Term Paper by Will Pith PMAN 639 – Project Quality Management Professor University June 24, 2010 Product Quality Design Achievement Table of Contents 2 What is Product Quality................................................................................................................................ 4 Implementing Product Quality: Total Quality Management ........................................................................ 5 Implementing Product Quality: Core Competencies .................................................................................... 8 Implementing Measures to Improve Quality - Wolverhampton .................................................................. 19 Conclusion .................................................................................................................................................. 19 References ................................................................................................................................................... 20 Product Quality Design Achievement Introduction Product quality design can be an amorphous concept, even when it is thoroughly explained, with an abundance of examples. Part of the difficulty is the various arenas in which product quality is required. Construction, automobile manufacturing, and information systems 3 are just a couple of areas...
Words: 3264 - Pages: 14
...Table of Contents Introduction 4 The Value Chain 4 Operations 5 Outbound logistics 5 Technology 6 Core Competencies 6 Conclusion 7 References 9 Introduction Chevron Corporation is multinational energy organization engaged in every facet of the oil, natural gas and thermal energy industries. Its downstream operations include selling products such as fuels, lubricants and petrochemicals to the global market. Chevron’s success is greatly driven by their vision ‘to be the global energy company most admired for its people, partnership and performance’ (Chevron Corporation, 2015), reflecting their initiative towards being socially responsible as well as their ambition towards exceeding expectations. Despite growing concerns towards using more renewable forms of energy, Chevron has been able to maintain its competitive position of #3 on the Fortune 500 by establishing new joint ventures internationally and undergoing mass long-term projects to ramp up their production growth. The Value Chain Operations One of the key elements to Chevron’s growing success is their planning towards making long-term decisions such as multiple billion-dollar takeovers and projects, as well as Chevron maintaining their core operations around refining crude oil into petroleum products. Doing this helps the company to remain results oriented, rather than confirming to the demands of lobby groups (Corddry, 2015). Chevron’s long-term exploration and production strategies...
Words: 1409 - Pages: 6
... 08 Fall 08 Fall Exercise A - Starbucks in US: strategies and core competencies GROUP 6 Exercise A - Starbucks in US: strategies and core competencies GROUP 6 Thijs Bavelaar - 091698 Carlijn Swagemakers - 120014 Sam Verlaat - 111449 Bas Vliegen - 122959 Thijs Bavelaar - 091698 Carlijn Swagemakers - 120014 Sam Verlaat - 111449 Bas Vliegen - 122959 Executive summary Within this report the Starbuck’s Corporation is being analyzed, in this way the company can be positioned on how they are performing within the competitive set. Through research Starbucks’ core competencies are found, and on elaborated. Those competencies are researched in the competitive set with the main competitors of Starbucks’ as well, via basic benchmarking there has been determined where Starbucks is within the market. Table of Contents Introduction 4 Core competencies 5 Key competitors 9 Competitive advantages 11 Communication within organization 12 Competency - strategy matrix 13 Conclusion and recommendations 14 Bibliography 15 Appendices 19 Appendix 1: Value chain analysis 19 Appendix 2: SWOT analysis 22 Appendix 3: Functional analysis 25 Appendix 4: VRIO analysis 26 Introduction The purpose of this paper is to analyze both Starbucks’ strategies and core competencies, and use this analysis to assess the degree of synergy between the two. First, the core competencies of Starbucks, specified to the US, are identified and presented with the...
Words: 6083 - Pages: 25
...Table of Contents Executive Summary 3 Introduction 3 Benefits of Hamel & Prahalad’s concept of Core Competence 4 Disadvantages of core competency 6 The concept of Icarus Paradox and its comparison with core competencies 7 Conclusions 8 References 9 Executive Summary This report takes an account of Core competencies that were introduced by C. K. Prahalad and Gary Hamel in 1990. Evaluating this business concept, its advantages and disadvantages are examined. The report also examines another concept of Icarus Paradox identifying reasons for failures of highly successful businesses. The disadvantages of core competencies and Icarus Paradox business concept have similarities. Introduction Several companies are still struggling to identify the most highly effective approach to compete in global competition. Back in the 1980s, top executives were expected to rebuild and de-layer the organization as a capability to successfully survive in the organization (Harvard Business Review 1990, p. 1). 1990s was the era where these executives were expected to demonstrate their capability of recognizing, harvesting and exploring those competencies that can result in business growth and sustainability. This clearly means that these executives should be capable of rethinking and reconceptualising the organization, altogether. However within a period of last 10 years, there are few examples of companies such as GTE that have successfully positioned themselves...
Words: 2440 - Pages: 10
...ELECTRONIC ASSIGNMENT COVERSHEET | | Student Number | 32695016 | Surname | Zhang | Given name | Ming | Email | Zhangming_90@hotmail.com | | | Unit Code | BUS317 | Unit name | Strategic Management | Enrolment mode | | Date | 4th Oct 2015 | Assignment number | 1 | Assignment name | Short Eassy | Tutor | Frankie Yee | Student’s Declaration: * Except where indicated, the work I am submitting in this assignment is my own work and has not been submitted for assessment in another unit. * This submission complies with Murdoch University's academic integrity commitments. I am aware that information about plagiarism and associated penalties can be found at http://www.murdoch.edu.au/teach/plagiarism/. If I have any doubts or queries about this, I am further aware that I can contact my Unit Coordinator prior to submitting the assignment. * I acknowledge that the assessor of this assignment may, for the purpose of assessing this assignment: * reproduce this assignment and provide a copy to another academic staff member; and/or * submit a copy of this assignment to a plagiarism-checking service. This web-based service may retain a copy of this work for the sole purpose of subsequent plagiarism checking, but has a legal agreement with the University that it will not share or reproduce it in any form. * I have retained a copy of this assignment. * I will retain a copy of the notification of receipt of this assignment. If you...
Words: 1571 - Pages: 7
...SUPPLY CHAIN MANAGEMENT To begin I should define a core competency as this is related with the Supply Chain in my review, so first, what is a core competency? According to Fitzsimmons (2012), core competency is something that the company does so well that it provides the company a competitive advantage. Core competency gives the company hard-to-imitate advantage. One of the Toyota's core competencies is their production system which is known as Toyota Production System (TPS). This is consists of Lean manufacturing and Just-In-Time (JIT) Production. Lean Manufacturing is the production practice in which it is focusing on the elimination of waste and continuous improvement over long-term. Lean Manufacturing has been proven to be successful in improving productivity and reducing cycle times. On the other hand, Just-In-Time production is the production practice in which it is focusing on synchronizing the material flow so that when one item moves out from a work station, another item is ready to move in. It allows Toyota to keep their inventory to the minimal levels and this can help the company to reduce the cost significantly. Toyota Production System has enable Toyota to gain competitive advantage over their competitors. Many companies viewed Toyota and argued that many of those companies which have studied Toyota Production System for decades and try to imitate their production system but not many companies have not been proven to be successful in imitating their production...
Words: 1575 - Pages: 7
...A distinctive competency is a competency unique to a business organization, a competency superior in some aspect than the competencies of other organizations, which enables the production of a unique value proposition in the function of the business. A distinctive competency is the basis for the development of an unassailable competitive advantage. The uniqueness differentiates this competency from all others, whether a core competency or simply a competency. Leader's responsibility regarding competency -- ""...the task of building special values and a distinctive competence into the organization is a prime function of leadership."" Source: Selznick, 1957, pp 27. Sources of distinctive competency -- Distinctive competencies, the basis for competitive advantage, can come from technology, industry position, market relations, cost, business processes, manufacturing processes, people, customer satisfaction, or just being first. The insightful integration of complementary elements of the business model is the strongest form of competitive advantage known. This is because it is so difficult for competitors to understand and even more difficult to replicate, especially when the business model elements of value, purpose, vision, culture, and identity are intertwined in a powerful business solution. Examples of distinctive competency -- Toyota has a distinctive competency in lean manufacturing. GE has a distinctive competency in management development. These companies also...
Words: 1210 - Pages: 5
...to maximize a firms [sp] profit potential, a corporation should match its greatest strengths, with external factors to create opportunities. When assessing opportunities to acquire a new business unit, firms should only seek to acquire units that have strengths that match, enhance or can be combined with the firms established strengths. The article [which? there is no list of references -- you’re supposed to discuss an issue from class before discussing the article] is about how firms are purchasing business units that do not align with their strengths or the vision/mission of the parent corporation. Once the business unit is acquired the viable option is to sell if off in pieces because it is not contributing to the corporations strengths. We agree with the author [sp] premise that diversification should not be pursued unless it will help a parent corporation achieve its already established mission. Corporations should avoid acquiring firms that possess strengths or missions not aligned with the parent corporation. A firm should not see purchasing business units as strength [clumsy]; a corporation’s strength is not an action. A corporation should see the reason why they have accumulated the financial resources necessary to purchase additional business units as their strength. Once that strength is identified the corporation should be pursing business units that have underlining strengths that will enhance the parent corporations [sp] ability to pursue their mission and maximize...
Words: 689 - Pages: 3
...Name: Institution: Professor: Date of Submission Apple Inc. is a multinational corporation that designs and develops then sells computer software, consumer electronics, personal computers and online services. It is best known for hardware products such as the iPod, iPhone and iPad tablets. The online services it provides include iTunes Store, App Store and iCloud. The consumer software products includes the iOS and OS X operating systems, the Safari browser and iTunes browser. The core competence of a firm is something which a firm does very well. It is something that competitors will find difficult to adopt or copy. Core competencies will allow a company to deliver great value to customers. They are abilities or skill sets that are leveraged to markets or other products. Apple Inc. has outstanding design of its products as one of its core competency. The use of these outstanding designs has given them easy access to many markets in a manner that seemed impossible. The tablet computers have been in the market for years long before the iPad. However, after Apple launched the iPad, the market for tablet computers exploded. This was also the same for MP3 players. Numerous MP3 players were in the market long before the release of the iPod. The unique design of the iPod made it an instant success soon after it hit the market. Apple Inc. has leveraged this core competency, that is, it has used it with the aim of gaining competitive advantage. This has enabled the company to...
Words: 603 - Pages: 3
...CHAPTER 6 Corporate-Level Strategies Learning Objectives CONTENTS After reading this chapter, you should be able to: Introduction 1. Understand corporate strategy and identify its components. Corporate Strategy 2. Evaluate and identify different approaches to corporate strategy development. The Portfolio Approach 3. Understand how organisations can create and sustain the multibusiness advantage. Corporate Strategy and Adding Value 4. Appreciate how different corporate strategies could add value to a corporation. 5. Appreciate the complexities of developing corporate strategy at the international level. The Core Competence Approach Creating and Sustaining the Multibusiness Advantage Corporate-Level Strategy in the International Perspective Summary Study Questions References and Further Readings 109 110 CHAPTER 6: Corporate-Level Strategies Opening Case The case study organisation is one of the largest international hotel chains operating in more than one hundred countries with its internationally recognised brands. However, the company does not have a culturally diverse workforce at the senior level. It usually recruits executives to the key decision-making positions either from the United Kingdom or the United States. In this respect, it is defined as Anglo-Saxon. Some people argue that the company should get the best from other nationalities involved in the development of an organisation’s strategy. Different...
Words: 5817 - Pages: 24