Core Competencies

What are core competencies?

A core competence is something unique that a business has, or can do, strategically well

What did Prahalad and Hamal say about the concept of core competencies?

‘The key to competing in the future is building, deploying, protecting and defending core competencies..’

What are examples of core competencies?

• Collective learning within the business

• Ability to integrate skills and technologies

• Ability to deliver superior products and services

• Ways a business is differentiated to be competitive

What are Ikea’s core competencies?

• Innovative design capabilities

• Unique organisational culture

What are Apple’s core competencies?

• An integrated ecosystem of software and devices

• Design built around the user

What are Dominos’ core competencies?

• Integration of multi-channel systems

• A profitable franchise model

What are Starbuck’s core comptetencies?

• Localised customer experience

• Differentiated global brand

What are the 3 conditions?

1. Does it provide consumer benefits?

2. Is it easy for competitors to imitate?

3. Can it be leveraged widely to many products and markets

How can the key conditions be applied to Ikea?

1. Provides consumer benefits?

2. Not easy for competitors to imitate

3. Leveraged widely to many products and markets?

What did Prahalad and Hamel suggest businesses should do?

• Focus on core competencies

• Outsourced non-core activities

What are the criticisms of the core competencies approach?

• Over-zealous outsourcing has damaged business competitiveness

• Difficult to identify genuinely unique core competencies

• Possible for a business to become complacent about its core competencies