Answers:
The
term “Core Competency” has its origin in an article titled “The Core Competence
of the Corporation”, written by C. K. Prahalad and Gary Hamel for the Harvard
Business Review in 1990. In this article, core competency has been defined as
“The collective learning and coordination skills behind the firm's product
lines”. The authors illustrated that the core competencies of an organization
led to the development of core products, which in turn, can be used for
personalization of products for end users. An organization’s core competency is
developed through 7continuous evolution over a period of time. Core
competencies are also essential to succeed in global market.
The
authors claimed that – “In the 1990s managers will be judged on their
ability to identify, cultivate, and exploit the core competencies that
make growth possible - indeed, they'll have to rethink the concept of the
corporation itself”. (C K Prahalad and G Hamel, 1990.) When the core
competencies are matched with the market opportunities, new businesses are
created. By combining and matching core competencies to market opportunities,
multiple businesses can also be created. The core competencies help to bind the
business units together so as to form a comprehensive portfolio.
The
factors which help to identify the core competency of the organization –
a) It should provide the company with a wide
variety of markets
b) It should contribute significantly to
product benefits
c) It should be difficult for competitors to
imitate or duplicate