Assignment || Overview of Strategic Management

Running head: STRATEGIC MANAGEMENT
STRATEGIC MANAGEMENT
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PART A
Introduction
Core competency is one of a concept that is used in the strategic management theory. The
concept was introduced by C.K. Prahalad and Gary Hame. Core competency can be defined as a
combination of various tangible and intangible resources required to differentiate a firm offering
common goods and services in the market. Henceforth core competency is the competitive
advantage of the business organization. As mentioned by Adomßent and Hoffmann (2013), it
helps to provide potential access of various markets and makes significant contribution to the
benefits of the customers. The core competencies of a business organization make it dissuades
the competitors to imitate the products and services offered by the company (Chouhan and
Srivastava 2014). The core competencies might include the fine optics of a camera, precision
mechanics, and other elements unique to the products and services offered by the business
organziation. It can be explained as that particular skill or technique of a particular business
organization which enables the organization to deliver additional values to the customers. The
core competency of the business organization also provides additional access to new makets. It
has been illustrated by C.K. Prahala and Gary Hamel that core competencies might positively
impact the business organziation and its operations (cK Prahalad 1990). This can be used further
to develop variety of products for the end users. Therefore, understanding the concept of core
competences can be beneficial for the companies operating in the highly competitive business
environment. This is used by the firms to raise the values of the stakeholders and the customers.
The purpose of this report is to critically examine the concept of core competencies and define
the concept. It provides arguments for and against it concerning its adaptation. Further, it

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explains the concept and the ways in which it fits in the present scenario and its relevancy in
meeting the business goals and challenges. Lastly, it sums up the main points and concludes the
report.
Discussion and analysis
Definition and concept of core competencies
The core competencies can be defined as a combination of various resources and skills of
the business organization to differentiate itself in the marketplace. As mentioned in an article
titled: the core competence of the corporation” by C.K Prahala and Gary Hamel, core
competencies are developed by continuous improvement during a period of time rather than
introducing a huge change cK Prahalad (1990). In the emerging global market, it is highly
essential for the business organization to build core competencies. For example, NEC introduced
its portfolio of core competences which enabled the company to dominate the
telecommunications and electronics market. Business organizations can use core competencies to
gain success at contrivance of core products. It has been stated by David and David (2019), that
the overall competitiveness of the business organization is based on the ability to develop and
enhance its core competencies. It involves the ability of the organization to develop the core
products, the new business, and the core competences. It is therefore, an outcome of business
strategies which can be enforced by the highly level management to utilize the skills and talents
to its full capacity. As defined by C.K. Prahalad and Gary Hamel (1990), core competencies are
known as the “collective learning across the corporations” (cK Prahalad 1990). C.K. Prahalad
and Gary Hamel (1990), illustrates the ways in which the top management or the senior

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executives of the business organization can develop foresight which enables it to adapt to the
necessary changes and find out ways to effectively utilize the resources in the organization. As
mentioned by ENGİNOĞLU and Arikan (2016), there must be a point of view based on which
the core competencies of the business organization can be build. It has been stated by Foss and
Knudsen (2013), that there must be a particular point of view concerning the future opportunities
and building ways to exploit them. This can enable the business organization to become future
industry leader. According to Goetsch and Davis (2014), in order to be competitive in the
market, the business organization requires both tangible and intangible resources such as core
competences and strategies. It is essential for the business organization to manage its
competencies in corresponding to the changes in the industry in the future. For example,
Microsoft Corporation’s expertise in IT related innovations and improvements such that it is
difficult for the competitors in the same industry to imitate or compete with the core
competencies. However, it has been argued by Gökkay and Özbağ (2015), that most business
executives or the top management do not develop a corporate view of the future in the race to
achieve cost reduction, enhance quality and improve productivity as it requires high level of
commitment and high intellectual energy. As explained by Prahalad and Hamel (1990), the core
competencies are the engines for the development o core products and services. They are
considered as the roots on which the overall business organization grows like the tree whose
products are the fruits of the tree. It is believed by Hsu et al. (2014) that the core competencies
contribute to the competitiveness of wide range of products. Therefore, it can be said that the
core competencies of the organization enables it to stand out among the crowded market and the
competitors. It ensures maximum value to the consumers. As stated by Kabue and Kilika (2016),
it sparks new strategies and anticipates customer satisfaction. It ensures future growth and