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Core Competency
TO: Professor Greg Waller
FROM: Jim Kovach
May 31, 2001
MEMO
TO: Professor Greg Waller
FROM: Jim Kovach
SUBJECT: Core Competency
DATE: May 31, 2001
Core Competency
Core competencies are not like competitive advantages. Competitive advantages separate companies for a short period of time until all the companies share the same advantage. Core competencies may span many years after continued development.
Identifying core competencies
There are three characteristics that identify core competencies. First, a core competence will make a company able to grow across different fields. For example, Sony was able to expand on their small compact items like handheld televisions, or Discmans by creating an atmosphere of sharing among technicians in the company. This core competency led to a competitive advantage over Sony’s rivals for being able to produce miniature items that worked as good or even better than larger competitor products across diverse markets. A second characteristic includes the ability to contribute to the customers assumed benefits of the product or service. Sony was able to let individuals enjoy music through handheld Walkmans. This was seen as an enormous benefit to people taking long plane trips, or short walks. Finally a core competency should be difficult for a rival to imitate. Competitors were able to copy certain miniature items, but not able to copy Sony’s technological superiority and ability to change items quickly to fit customer needs.
Why you need core competencies
The ability to enter new or old markets depends on the company’s ability to build on core competencies. Divesting in certain business aspects could hurt the company down the road. Sony’s Betamax was not good for the company at the time, but later helped them in markets of 8mm tapes and even camcorders. If core competencies are not created over time, then the company cannot grow....
TO: Professor Greg Waller
FROM: Jim Kovach
May 31, 2001
MEMO
TO: Professor Greg Waller
FROM: Jim Kovach
SUBJECT: Core Competency
DATE: May 31, 2001
Core Competency
Core competencies are not like competitive advantages. Competitive advantages separate companies for a short period of time until all the companies share the same advantage. Core competencies may span many years after continued development.
Identifying core competencies
There are three characteristics that identify core competencies. First, a core competence will make a company able to grow across different fields. For example, Sony was able to expand on their small compact items like handheld televisions, or Discmans by creating an atmosphere of sharing among technicians in the company. This core competency led to a competitive advantage over Sony’s rivals for being able to produce miniature items that worked as good or even better than larger competitor products across diverse markets. A second characteristic includes the ability to contribute to the customers assumed benefits of the product or service. Sony was able to let individuals enjoy music through handheld Walkmans. This was seen as an enormous benefit to people taking long plane trips, or short walks. Finally a core competency should be difficult for a rival to imitate. Competitors were able to copy certain miniature items, but not able to copy Sony’s technological superiority and ability to change items quickly to fit customer needs.
Why you need core competencies
The ability to enter new or old markets depends on the company’s ability to build on core competencies. Divesting in certain business aspects could hurt the company down the road. Sony’s Betamax was not good for the company at the time, but later helped them in markets of 8mm tapes and even camcorders. If core competencies are not created over time, then the company cannot grow....