New business opportunities and prospects arise only when the core competence intersects with the market requirements and expectations. Core competence should not result in core rigidity. It should be flexible enough to change its focus and strengths according to the business requirements.
Core competence (Bateman and Snell) is something a company does especially well when compared to its competitors. Typically, core competence refers to a set of skills or experience in some activity, rather than physical or financial assets. The point to be stressed is that core competence, besides being an exceptional characteristic, should differentiate the company amidst other players.
Core competence (C K Prahalad and Gary Hamel, 1990) is the main underlying force for competitive advantage. Core competence of an organization is the fundamental understanding, capability or know-how in specific. The core competence may be explained as a strength that can lead a company to a unique position. The core competence may be due to an expert Board of Directors who can lead the company through the objectives towards the goal targeted in a smooth and well-organized manner.
Again, core competence is a combination of complementary skills and knowledge bases embedded in a group or team, that results in the ability to execute one or more critical processes to a world-class standard. (McKinsey Quarterly 1997 Number 1.)
According to the McKinsey Quarterly 1997 Number 1, core competence for most of the companies is like a mirage. The paper deals about the routes adopted for making core competence work in an organization, namely-evolution, incubation and acquisition. Evolution deals with building core competence through self-developed programs or schemes, which very rarely work. Incubation deals with isolating a team and assigning them the charge of gaining the core competence in a specific period in the promoting environment. Acquisition is resorted to because of the time delay felt in the incubation route, but this is likely to fail compared to the other two routes. Hence, the choice of routes to implant the core competence is an art by itself. |
