Core competencies

Core competencies are the unique capabilities that a company possesses, which gives it a competitive advantage in its industry. These competencies are typically specific to a particular company and are difficult for competitors to replicate. They can include technical expertise, unique business processes, superior customer service, and strong brand recognition.

Definition

The concept of core competencies was introduced by C.K. Prahalad and Gary Hamel in their 1990 article for the Harvard Business Review, titled "The Core Competence of the Corporation". They defined core competencies as "the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies."

Characteristics

Core competencies have three main characteristics:

1. They provide potential access to a wide variety of markets.
2. They make a significant contribution to the perceived customer benefits of the end product.
3. They are difficult for competitors to imitate.

Examples

Some examples of core competencies include:

• Apple's design and innovation skills, which have allowed it to create a range of successful products like the iPhone, iPad, and Mac.
• Amazon's logistics and distribution capabilities, which enable it to deliver products quickly and efficiently to customers around the world.
• Toyota's production system, known as the Toyota Production System (TPS), which is renowned for its efficiency and quality.

Importance

Core competencies are important for a number of reasons:

• They help companies differentiate themselves from their competitors.
• They allow companies to innovate and create new products and services.
• They can lead to sustainable competitive advantage.

See also

• Competitive advantage
• Strategic management
• Business strategy

References

Core competencies Resources
Latest articles Most recent articles Ongoing trials	Wikipedia