The term core competency was first coined by Prahalad and Hamel. According to him core competencies are the basis of competitive advantage and allow the firm to introduce an array of new products and services. Core competencies lead to the development of core products. Core products are not directly sold to end users; rather, they are used to build a larger number of end-user products. For example, motors are a core product that can be used in wide array of end products like fan, coolers etc. There are three tests useful for identifying a core competence. A core competence should:
1. Provide access to a wide variety of markets
2. Contribute significantly to the end-product benefits
3. Be difficult for competitors to imitate.
For further details read http://www.quickmba.com/strategy/core-competencies/
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1 comments:
hmm..first and second point are bit different from the lecture we had in our class...
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