INTRODUCTION: Theory and Principles
In 2002 companies will continue to grow and become market leaders only if there ability to examine the companies core competencies by identifying, cultivating, and exploiting these competencies continues now and beyond into the future. Failure to do so could be catastrophic for even the most powerful of companies, not in the short run but over time competitors will get ahead and the technology gap is so significant in core competencies that these corporations will never be able to catch up. That is why as we progress into the 21st century core competencies of a company is what is going to keep the company competitive and ahead of the rest, and on the brink of technological breakthroughs in their specified area. In this new-economy world, where companies compete on the basis of core competencies and relationships, human resources (meaning a skilled and knowledgeable workforce) will emerge as a key source of competitive advantage. Core competencies, by definition, are "knowledge sets and technical skill sets," (Vicere, 2001) which is "the collective learning of the company as a whole" (Prahalad & Hamel, 1990). Thus, core competencies of a company will only get stronger as application or the sharing of ideas and or poaching of personnel enhances them. Just as easily "core competencies can also diminish if they are not being applied or shared within a company relating to Strategic Business Units (SBU)" (Kotler, Armstrong, Brown & Adam, 1998). Strategic alliances between companies is emerging, and this encompasses the merging of two companies core competencies and producing core competence, core products and end products which no other company can rival, thus producing technological breakthroughs which previously seemed impossible.
The goal of core competencies is "to build world leadership in design and development of a particular class of product functionality" (Bradmore, Joy, Kimberley, & Walker, 1997). Having advantages and control over core products is critical for several reasons. A dominant position in core competencies and core products enables a company "to shape the evolution of applications and end markets" (Jain, 2000). Strategic core products born from the evolution of core competencies leads companies to economies of scale and scope. It should be noted that cultivating core competencies does not necessarily mean spending millions and millions on research and development, rather "core competency is: co-ordination of production skills, integrating technologies, organisation of work, delivery of value, communication, involvement and commitment to working across organisational boundaries" (Jain, 2000). In order for a company to be seen with a futuristic outlook and on the brink of technological breakthroughs a company would have to be the leader at each level meaning "1. Core competency, 2. Critical components and 3. End products," (Prahalad & Hamel, 1990) only then can it distinguish itself from it competitors as a market leader.
CASE STUDY: DAIMLERCHRYSLER
Daimler Chrysler is one of the world's leading automotive, transportation and services companies. Its passenger car brands include "Maybach, Mercedes-Benz, Chrysler, Jeep®, Dodge and smart. Commercial vehicles are produced under the Mercedes-Benz, Freightliner, Sterling, Western Star, Setra, Thomas Built Buses, Orion and American LaFrance brands. With 372,500 employees, Daimler Chrysler achieved revenues of EUR 152.9 billion ($136.1 billion U.S) in 2001" (www.daimlerchrysler.com). Daimler Chrysler today has a global workforce, a global shareholder base, a global brand awareness and a global outlook. Daimler Chrysler's strategy rests on four pillars: Global Presence, Strong Brands, Broad Product Range, and Technology Leadership" (www.daimlerchrysler.com).
Daimler Chrysler has changed a great deal from wide-ranging diversification to fully concentrating on the...