Core

Competencies of
TATA motors
Core Competency Model
• Developed by Prahalad and Hamel

• It is a strategic tool that tells a long-term competitive advantage is achieved by having the ability to
build a core competency at a lower-cost and faster than competitors.
• Strategy is about competing to be unique.
What is a Core Competency?
• A core competency is something unique and important that a business can do strategically well.

 “Unique” means that competitors aren’t doing it.

 “Important” means that it is fundamental to helping the company generate sales.

 “Strategically well” means that it’s difficult for competitors to copy.

• For example, IKEA’s core competency is its unique design capabilities.

 How to find your Core
Competency
There are 5 tests to determine whether something is a true core competency. If you can answer yes to all
of these questions then you might just have identified a core competency.

1. Does it provide consumer benefits?

2. Is it difficult to imitate?

3. Can it be leveraged widely?

4. Does it uniquely identify the company?

5. Is it difficult to pin down?

 Core Competency of TATA motors
Tata Motors Limited has developed its core competency in designing highly efficient engines at low
cost.

1. Does it provide consumer benefits?

Yes. Consumers get very efficient vehicles at low cost.

2. Is it difficult to imitate?

Yes. It’s very difficult to produce vehicles with high efficiency at very low prices. Even if a competitor
could match Tata motors’ efficiency it wouldn’t be able to match it on price. This is due to the
economies of scale of Tata Motors’ global distribution network and its location in India.
3. Can it be leveraged widely?

Yes. Tata Motors’ expertise in developing highly efficient engines at low price can be used to produce
all kinds of products, from passenger cars, trucks to luxury cars & buses.

4. Does it uniquely identify the company?

Yes, Tata motors has been known for its efficient vehicles at low prices.

5. Is it difficult to pin down?

Tata Motors’ core competency has developed through a combination of technology, skills and
processes, which makes it very difficult to pin down.