Critical Analysis of 'The Core Competence of the Corporation'

Running head: International business strategy
International business strategy
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1International business strategy
Introduction
The term core competency refers to the strategic advantages of an enterprise or resources
with technical abilities and advanced knowledge application which allow the company to remain
competitive in the industry in which it deals in (Prahalad and Hamel 2006). In a more specific
manner, the area in which the company gives its best effort and remains in the better position in
comparison with other similar companies is considered to be the company’s core competency
which distinguishes the company from other companies (Morden 2016). It can be noticed that
the theory and concepts of core competency was first introduced by Gary Hamel and C. K.
Prahalad. By applying the framework of core competency the organizations are able to capture
the global market. Moreover, it has been monitored that by adopting core competence
organizations are able to contribute towards the benefits of the customers in a better manner.
Hence, the relatively new theory core competency is a management theory which the article
named ‘The Core Competence of the Corporation’ discusses about. Thus, the discussion below
will give a critical analysis of the article by Gary Harmel and C K Prahalad. The two authors
in their article had reviewed three conditions which must be fulfilled by a business in order to
increase core competency.
Discussion
As mentioned in the above, there are three conditions which must be reviewed a business
activity in order to assure core competency as emergent process of strategy (Waddell 2017). In
accordance with the statements made by the article, the very first condition is about providing
superior value or benefits to the customers whereas the second condition is about immitability

2International business strategy
(Jiang 2016). To be more specific, the company must assure that the core competency is not
easily is not easily replicated or followed by other rival companies in the same industry (Yang
2015). The third condition is nothing but related to the quality of rare which falls under the
deliberate process of strategy. A company should concentrate on such an area to be increasing its
strength which will be hardly found in other companies.
The article ‘Core Competence of the Corporation’ makes an urge to the leaders in order
to reconsider the idea of the corporation from the perspective of business portfolio management
and optimization of interdependency to the competency portfolio widened all over individual
businesses at the same time providing sustaining and factual competitive advantage. The article
gives special attention on the nurture of core competency which requires different thought
process along with the different process of operation, suggested by the lines: “When the
organization is conceived of as a multiplicity of SBUs, no single business may feel responsible
for maintaining a viable position in core products nor be able to justify the investment required to
build world leadership in some core competence. In the absence of a more comprehensive view
imposed by corporate management, SBU managers will tend to under invest.”
The article also gives a word of cautions to the businesses who are presently
concentrating on the recent economic environment as an appropriate one with which the
acquisition will result ensuing suitability. The article suggests while challenging the present push
towards the business process that are more decentralized in manner as implied by the excerpt of
the article “the fragmentation of core competencies becomes inevitable when a diversified
company’s information systems, patterns of communication, career paths, managerial rewards,
and processes of strategy development do not transcend SBU lines.”