Core competence is a pivotal factor that a business utilizes as strategic advantage in order to compete in the industry. Following is discussed the characteristics and development of core competence:
Characteristics of Core Competence
Unifying Principles of Organization
Core competence provides unifying principles to the management of the organization and it helps to identify the optimal potential of the organization. It also plays important role in formulating strategies and implementing strategic plans. Like, Walt Disney produces animations and characters and this unifies the business to align strategies to improve technology or bring innovation.
Core competence allows providing value in return to the customers. Due to rapid change in external markets and shifting demands / preferences, core competence helps to give a route to access new markets. Like, Walt Disney expanded its business to China and explored new market due its competence of animations.
Core competence is a unique feature that other organizations can rarely initiate, thus it places the business at top in the market due to uniqueness. For example Walt Disney developed creative characters and attained copyrights which now become competence of the business.
How to Develop Core Competence?
The method to develop core competence is to identify the potential of organization and then make effective use of human resource, other resources and market potential to develop innovative and highly exclusive features to the existing or new products or services. Like, Walt Disney developed theme parks which became very popular due to uniqueness and innovation.
Thompson, Stickland and Gamble. Crafting and Executing Strategy: The Quest for Competitive Advantage, Concepts and Cases (18th ed.). McGraw/ Hill.