CORE COMPETENCES

The approach:
It is an approach that looks inside the company in fact it is focused on inside
components of the company, while the Porters 5 forces approach and the game
theory look outside the company focusing on the external environment. It is an
approach focused on encouraging integration and collective learning through the
components, because the organization is not only the sum of them.
What they are:
The core competence are particular strengths relative to other organizations in the
industry, which provide the fundamental basis for the provision of added value . They
reflect the collective learning in the organization and how to coordinate different
production skills and integrate multiple streams of technologies.
In order to build new core competences the company has to invest in new
technologies and infuse resources throughout Business Units. It is not important for
an organization to have a lot of Core competences, the fundamental thing is to be
able to exploit them, even if they are only two or three.
Clarify core Competence
It is important in order to make the organization understand how to support the
competitive advantage. It could be possible articulating a strategic intent that
defines the company and its market. And identify the core competences that are
necessary to support that intent. Identify them could be possible using three tests:
1) Provides potential access to a wide variety of markets.
2) A core competence should make a significant contribution to the perceived
customer benefits of the end product
3) Should be difficult for competitors to imitate it.
Build them
Cultivate a core competency mind set
Identify projects and people who embody the firms core competencies. In fact they
are corporate , not unit.

GTE and NEC
GTE in 80es was well positioned to become a major player in the evolving information
technology industry NEC is smaller, it had a comparable technological base and
computer businesses, but it had not experience as an operating telecommunication
company
GTE put switching, transimission and digital PABX into joint ventures NEC had
consolidated its position in mainframe computers.it is the top 5 in revenue in
telecommunications: it conceived of itself in terms of Core Competences, GTE did
not.
This is an instructive case to understand the changing basis for global leadership. NEC
articulated a strategic intent to exploit the convergence of computing and
communications, what it called C&C . NEC constituted a C&C committee of top
managers to oversee the development of core products and core competences.(is
important to understand the fact that core product : is the main component of the end
product which incorpe the companys core competences).It put in place coordination
groups that cut across the interests of individual businesses.
NEC is different from GTE didnt have clear its strategic intent.
They conceived of them selves in different way NEC as a portfolio of Competences ,
while GTE as a portfolio of business: managers continued to act as if they were
managing independent business unit, but decentralization made difficult to focus on
Core competences.
In the long term the real source of advantage is to develop the ability to consolidate
corporatewide technologies and production skills into competences that empower
individual businesses to adapt quickly to changing opportunities. The problem is that
there are a lot of major companies that have had the potential to build core
competences but faild to do so because top managers was unable to conceive of the
company as anything other than a collection of discrete businesses.