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How soon does it ship: Available for download now
Type of bind: Digital
Format: Download: PDF
Label: Harvard Business Review
Manufacturer: Harvard Business Review
Page Count: 16
Printing Date: April 01, 2001
Publishing house: Harvard Business Review
Release Date: October 25, 2008
Sale Popularity Level: 871821
Studio: Harvard Business Review
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A company's competitiveness derives from its core competencies and core products. Core competence is the collective learning in the organization, especially the capacity to coordinate diverse production skills and integrate streams of technologies. First companies must identify core competencies, which provide potential acess to a wide variety of markets, make a contribution to the customer benefits of the product, and are difficult for competitors to imitate. Next companies must reorganize to learn from alliances and focus on internal development. McKinsey Award Winner.
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Rated by buyers 
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Despite the hype and fame around (a) this article and (b) Prof. Prahalad and Prof. Hamel, if one reads this article really carefully, one should realize how shaky Prahalad and Hamel's premises are on their claim on the importance of core competence.
In the article they compared GTE and NEC, and suggested that NEC was an much better company because it focused on its core competence. And how did they measure the performance of GTE and NEC? Turnover!
But wait, what about profitability? Nothing whatsoever! The truth is, GTE left NEC in the dust in terms of profitability throughout the 1980s & 90s. Indeed, by mid/late 1990s, NEC was struggling. NEC's CEO (who held NEC's "core competence" so dearly) was replaced and the new CEO steered NEC away from its "core competence" in an endeavor to regain profitability.
Go to the library and read the article and judge for yourself. Don't bother buying it.
Rated by buyers 
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my english is poor.i think this book is very good.
Rated by buyers -
C.K. Prahalad is Professor of Corporate Strategy and International Business at the University of Michigan; Gary Hamel is Founder and Chairman of management consultancy Strategos and Visiting Professor at the London Business School. Gary Hamel was lecturer in Business Policy and Management at the London Business School when this landmark-article was published in the May-June 1990-issue of the Harvard Business Review.
The authors argue that top executives need "to identify, cultivate, and exploit the core competencies that make growth possible - indeed, they'll have to rethink the concept of the corporation itself." Top executives need to rethink the corporation as a portfolio of competencies instead of a portfolio of businesses. On the third page, the authors finally define core competencies: "Core competencies are the collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies." The authors base this definition on the fact that a company's short-run competitiveness derives from the price/performance attributes of current products, but that long-run competitiveness derives from an ability to build, at lower cost and more speedily than competitors. Core competence is about the organization harmonizing streams of technology, communication, involvement, and a deep commitment to working across organizational boundaries. And the authors claim that unlike physical assets, core competence does not diminish with use. Than the authors continue with an important issue of describing what core competence is NOT. There are three tests to identify core competencies in a company: (1) potential acess to a wide variety of markets; (2) significant contribution to the perceived customer benefits of the end product; and (3) it should be difficult to imitate. The authors provide insights into how to make the distinction between core competencies, core products, and end products. They also compare the traditional strategic business units with core competence, whereby they note that competence building does need a corporatewide strategic architecture in order to enable exploit competencies.
This article was a landmark in the strategic management field and was probably the most influential published in the 1990s. The authors followed this article up with their 1994-bestseller 'Competing for the Future'. Although the principle of 'core competence' is difficult to understand, it has a strong impact on diversified organizations. I sometimes wonder the relationship with Porter's 'Competitive Strategy' (1980), in particular the generic focus-strategy. Highly recommended to all managers and MBA-students. A true classic. The authors use understandable business US-English
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