3.7.3 Core Competencies Flashcards
What is a core competence?
Something unique a business has or can do strategically well.
Who created the core competence theory?
Prahalad and Hamel.
What’s are the four ways a competence could cored to a business?
Collective learning.
Ability to integrate skills and technologies.
Ability to develop superior products and services.
Way a business is differentiated to be competitive.
What are the three conditions for a cc?
Provide consumer benefits.
Not easy to imitate.
Leveraged widely to may products and markets.
What are the criticisms of cc?
Overzealous outsourcing - damaged business competitiveness.
Difficult to identify unique cc.
Can become complacent about cc.
What are cc?
A company’s collective learning + technical skills.
What else do cc’s provide?
A competitive advantage.
What are the elements of the three test?
Provide access to a wide range of markets.
Contribute significantly to end product benefits received by the customer.
Difficult for competitors to imitate.
What it’s the effect of short termism?
Stops senior managers from thinking of the long term, and therefore seeing the big picture.
What is research and development?
Generation and application of scientific knowledge to develop new products improving production efficiency.
What is profit quality?
Measure the extent to which a type of profit is sustainable.
What is the effect of R&D?
Let’s in high price.
What is short termism a disincentive for?
Setting corporate objectives.
What is needed to develop new products?
R & D and a large amount of resources.
In terms of R & D, how are new products developed?
Judge short term and long term and the extent of investment in R&D.
The more invested the more likely to implement.
