Strength and Weakness of Core Compentency

Topics: Strategic management, Management, Core competency Pages: 3 (946 words) Published: April 29, 2014
Core competence (strengths and weakness)

Introduction
In order to anticipate changes in business, management should build an appropriate strategic plan. Focusing on a company’s core competencies establishes a unique integrated system that competitors cannot replicate. By the definition as Prahalad and Hamel (1990) stated, core competency is a collective knowledge about how to combine company’s diverse resources, technologies and know-how. As the foundation of competitive advantages for enterprise gaining long-term stability, core competence has both strengths and weakness.

Resource Based View and Core competence
To focus on the specific contents of core competence, the idea of “resource based view” (1990) is helpful to recognize what will be resource of core competence. The firm resources are classified in to three categories as physical capital resources, human capital resources, and organizational capital resources. These resources can be firm’s competitive advantage as valuable, unique, inimitable and sustainable.

Strengths of core competency
According to Prahalad and Hamel (1990), core competency is helpful for the companies to choose their strategic management pattern flexible and module outstanding enterprise culture as well as value; furthermore, core competency can help company to strengthen the organization management, since the firm has the unique resource.

Firstly, core competency considers the needs and value that customers need. This can significantly improve the efficiency of products and service improvement as well as reduce costs along with the increasing of competitive advantage of the firm. For example, the core competence of FedEx is the high-level logistic management, even it has the relatively more expensive than the peers, it still popular with high reputation among customers with efficient highly-speed delivery. Apple has the product of iPod Nano has the core competence of small size, which can be brought with conveniently....
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