Core Competencies of Wal Mart and Honda Instruments for Their Growth

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  • Topic: Core business, Wal-Mart, Strategic management
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  • Published : September 12, 2008
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Strategic Management
Term Paper

Core competencies of Wal mart and Honda Instruments for their Growth

Hari Kiran Babu.G (0711)
Naga Mounica.G (0723)
Sai Krishna Chaitanya (0736)
Surabhi Rajan (0749)
Sobhan Pavan Tej .K (0641)

Core Competencies

Core competencies lead to the development of core products. Core products are not directly sold to end users; rather, they are used to build a larger number of end-user products. For example, motors are a core product that can be used in wide array of end products. The business units of the corporation each tap into the relatively few core products to develop a larger number of end user products based on the core product technology. The intersection of market opportunities with core competencies forms the basis for launching new businesses. By combining a set of core competencies in different ways and matching them to market opportunities, a corporation can launch a vast array of businesses. Without core competencies, a large corporation is just a collection of discrete businesses. Core competencies serve as the glue that bonds the business units together into a coherent portfolio. Core competencies arise from the integration of multiple technologies and the coordination of diverse production skills. Some examples include Wal Mart’s Logistics and Honda’s engines. There are three tests useful for identifying a core competence. A core competence should: •Provide access to a wide variety of markets, and

Contribute significantly to the end-product benefits, and •Be difficult for competitors to imitate.
To better understand how to develop core competencies, it is worthwhile to understand what they do not entail. •Outspending rivals on R&D
Sharing costs among business units
Integrating vertically
Core competencies manifest themselves in core products that serve as a link between the competencies and end products. Core products enable value creation in the end products. Examples of firms and some of their core products include: •3M - substrates, coatings, and adhesives

Canon - laser printer subsystems
Honda - gasoline powered engines

Wal Mart Core Competencies
Core competencies play a major role in the success of the company. As far as Wal Mart is considered the following are the core competencies. They are as follows: •Operational Ability
Low Prices
Supply Chain
The above core competencies can be explained as follows:
Operational Ability:
Wal-Marts core competencies are its operational ability to streamline the supply chain through cross-docking inventory systems and efficient means of communication through technology. •Low Prices:

This is the one of the important core competency of Wal Mart. It has its stores all around the globe. In all the stores the prices of the products are low when compared to the market prices. •Quality:

Though the prices are low also it maintains the quality of the products it sells to the customers. This is one of the key core competencies that the Wal Mart is having. •Proximity:
In US Wal Mart store is located at every 5 miles. This shows how it is deeply rooted in the US market. Not only in US but in the other countries also it is more over same. •Supply Chain:
Wal Mart is not having any warehouses. The stock in the stores is maintained in Just in Time (JIT). If the racks are empty in the stores means the goods will replace the empty racks with time.

Strengths, Weakness, Opportunities, Threats of Wal Mart
Customer oriented
SAM’S Club customers able to buy in bulk
Super centers offer one stop shopping
Satisfaction guaranteed programs promoting customer goodwillBuy from local merchants when possible
Stock ownership and profit-sharing with employees
Leads industry in information technology
Ongoing development of its...
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