Core Competence

Farhan Bogra
G. Hamel C.K Parahlad
“Competing for The Future”

Bundle of skills and technologies

that enable a company to provide a
particular benefit to customers
“Competencies are mainly seen as inputs”
“The high ranking core competencies will ensure the
better-quality of end products/services”
Start from the inside, out

What does our

firm do best?
Why are core competencies important?

• They are the skill sets your organization

possesses that set it apart from its peers.
• They are what make your organization
unique.
• They are sources of competitive advantage.
• They are the building blocks to future
opportunities and earned income ventures.
3 Tests for Core Competence:

1. Relevance
2. Difficulty of Imitation
3. Breadth of Application
 MANAGING CORE COMPETENCIES

1. Selecting core competencies

2. Building core competencies

3. Deploying core competencies

4. Protecting core competencies

 Developing Core Competencies
• Management commitment- developing core
competencies takes time
• Focus- define the competencies needed
• People with appropriate skills
– Train current personnel
– Recruit personnel with needed skills
• Integration of these skills
– Usually a function of management
• Institutionalize the activity through processes and
procedures
• When competencies become
imprisoned, the people who carry the
competencies do not get assigned to the
most exciting opportunities.
• Only by leveraging core competency,
small companies can compete with
industry giants.
Examples
Procter and Gamble

Marketing and Advertising

Campbell's Soups

•Marketing
•Skilled educated workres mostly based on
researchers
 Gillette

Design of men's shaving products

 Sony

Advanced consumer electronics

 Rover

Off road vehicles (Land Rover, Range Rover)

Chrysler Corporation

Design and marketing of Mini-vans

  Honda

"full hybrid" Insight auto

 Fujitsu

Laptop with multimedia projection