THE CORE COMPETENCE OF THE CORPORTION

Core competence are those capabilities that are critical to business achieving competitive advantage . It can fulfil three criteria: 1. It is not easy for competitors to imitate. 2. It can be leveraged widely to many products and markets. 3. It must contribute to the end consumers experienced benefits. According to the author, CK Prahalad & Gary Hamel it is a specific factor that business sees as being central to the way it or its employees works. So, in the case there are two companies GTE & NEC. GTE was well positioned in the information technology industry; mainly because of telecommunications. And also induced in the business of switching & transmission systems, telephones, semiconductors, lighting products etc. It also produced Sylvania colour TVs. At that time GTEs sales were higher than NEC. NEC had business of computer & technological base and had no experience of operating Telecommunication Company. After some years of doing business as GTE focuses on Sylvania TV & Telnet, switching and transmission systems etc. And close down semiconductors, it affects on its position that its total revenue comes down from 20% to 15% Then NEC has emerged as leader in semiconductors and first tier players in telecommunications products and computer. Later on NEC included as top 5 companies in the world in revenue in telecommunications, semiconductors and main frames. Therefore NEC was conceived as Core competencies than GTE. NEC shifted many resources to strengthen its position, by using collaborative arrangements to multiply internal resources and also able to accumulate broad array of core competencies . NEC foreign technologies identify three interrelated streams of technological and market evolution: 1. Top management determine that computing world evolve from mainframes to distribute processing , from simple Ics to VLSI and communications from mechanical cross-bar exchange to digital systems. 2. Top management determined that semiconductors would be the companys most important core product. 3. As semiconductor-component entered into collaborative arrangement , then from investment point of view , it was much quicker and cheaper to use foreign technology. Core Competencies are the collective learning in the organization. It is about the organization of work and delivery value. Many managements are trapped in the strategic business units(SBUs) mindset. Building core competency is more ambitious and different than vertically integration . It should make a significant contribution to the perceived benefits of the end products. Since core competence are built through a process of continuous improvement and enhancement that may take longer , it will be content simply to serve distribution channel .

If companies core competencies are its critical resources and if top management must ensure the competence careers are not held by some particular business. Core competencies are corporate resources and may be reallocated by corporate managers. When the organization is conceived as multiplicity of SBUs, no single business feel responsible . Every SBU develope unique competency. They may think it to be its sole property. The benefits of competencies depends on the velocity of their circulation as well as their size of stock . The clear understanding of core competencies is must for the organization. It must look the overall goal. Managers should look many layers down to developed core competencies. A company will be fit to fight only if it is conceived of as a hierarchy of core competency. Core competencies are the well spring of new business development , they constitute the focus for strategy at the corporate level managers have to win manufacturing leadership in the core products and capture global share through brand building programs aimed at exploiting economies of scope.