The Core Competencies In The Corporation Case Study

Conquering and gaining a competitive position in the global market is highly determined by the ability of an organization to adopt strategic competencies that defines its purpose and value in the market. Core competencies includes the long-term core plan and products that are used to move an organization’s purpose from making the largest sales in the short-run but rather to be able to survive in the long run competition and economic situations. This is illustrated by use of two organization’s GTE and NEC whereby in the early 1980s GTE was a well-positioned company in the information technology industry recording the highest sales and profits as compared to their counterparts NEC who had almost similar products and services. However, in the early 1990s, NEC had overcome GTEs competition by becoming among the world’s leading companies in sales of IT and computer products. This was achieved by NEC’s top management ability of deriving a series of the company’s core competencies including coming up with designs that could counter the evolution of technology as well as making semiconductors the organization’s core products. This was in contrast not applied in GTE especially due to lack of collaboration between business units as a result of decentralization.
As illustrated in the above two organizations, core competencies are the roots to an organization’s growth in the long-run. While most companies focus on the performance and the price of their products as the success factors in the short-run, developing core competencies with minimum cost is essential in sustaining the business in the long-run. This involves the management’s ability to coordinate various production skills, and integrate organization’s resources as a way of developing unique and quality products that will sustain competition. Being the root to competitive advantage, core competencies involve constant communication, commitment and involvement of all the people across various levels of the organization. Unlike strategic business unit (SBU) that focuses mostly on developing and maximizing production of specific units with minimal costs, core competencies involves integrating various units’ production so as to achieve a competitive advantage in the market as illustrated by companies such as Canon and Honda.
Developing a core competence is characterized by three major traits which includes giving an organization the ability to access various markets. A core competency should also be complex in such that other companies cannot imitate it and finally, it should provide benefits to the customers who buy the company’s end products and services. The process of identifying and developing core competence is an essential tool that organizations should adopt as a strategy of dealing with changing market and demand. This issue is evident as seen by the problems that were encountered by telecommunication companies such as Motorola Company by losing their market privileges due to their failure to have a core competence despite the constant changing technology. In addition, organization’s top management should develop a roadmap or a strategic architecture that defines what core competencies to adopt in various scenarios. Lack of strategic road map could also lead to adopting a wrong development strategy.