Mastering the Hype Cycle by Jackie Fenn Mark Raskino & Mark Raskino

Author:Jackie Fenn, Mark Raskino & Mark Raskino [FENN, JACKIE]
Language: eng
Format: epub
ISBN: 9781422121108
Publisher: Harvard Business School Publishing Corp (Perseus)
Published: 2008-10-14T04:00:00+00:00

CORE COMPETENCE

C. K. Prahalad and Gary Hamel introduced the concept of core competencies around 1990.14 A core competence is defined as providing the capability to develop new products and services, making a significant contribution to the customer value proposition, and being difficult for others to emulate. Thus, it is the key source of a company’s competitive advantage. Companies that have developed deep expertise in technical, process, or scientific domains often identify these capabilities as the core asset that fuels their innovation programs. One of the examples Prahalad and Hamel suggested was Honda, whose core competence of combustion engine design enabled it to develop a variety of quality products, from lawn mowers and snowblowers to trucks and automobiles, all based around the company’s core competence. Disney also qualifies as a company with a strong ability to build out from its core competence, as the Disney magic ripples out from movies into theme parks, hotels, retail stores, and even a real Disney town (Celebration, Florida).

As with value disciplines, much of the work on core competencies relates to how they can be applied to create new strategies for market growth. Where core competencies have been identified for this purpose, they can also act as a powerful focal point for other types of innovation by highlighting areas where improvements will make a significant impact on the business. However, unlike with value disciplines, there is no pre-identified short list of core competencies to select from, because a core competence is relatively unique to the company that possesses it. This makes identifying your company’s core competence a more difficult undertaking if the corporate strategists haven’t already figured it out. In fact, value disciplines could be viewed as simply a list of generic core competencies.

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