how the organisation can exploit its strengths to achieve sustainable competitive advantage
According to Johnson, Scholes and Whittington (2008), core competencies refers to “the skills and abilities by which resources are deployed through an organisation’s activities and processes such as to achieve competitive advantage in ways that others cannot imitate or obtain”. Developed by Hamel and Prahalad in 1990, simply stated, (a) it provides customers with major benefits, (b) it is difficult to imitate and (c) it can be leveraged in many products and markets. Differentiated from regular competencies and capabilities, Hamel and Prahalad (1990) highlighted the underlying role of a core competence. They likened the diversified corporation to a tree, with the branches and canopy representing the wide range of end product in the various markets. The tree trunk represents the core products or physical embodiment of the core competency, which must be significantly related to the benefits received by the customer. The root which provides nourishment and stability represents the underlying skills and capabilities that form the basis of the core competencies.
In zeroing on a company’s core competency, using the above-listed criteria, Hamel and Prahalad (1990) identified Honda’s expertise in the design and manufacture of engines as its core competency. Based on the company’s underlying skills and capabilities identified in Farhoomand and Huang (2010) case study, namely Honda’s superior R&D, manufacturing techniques, strong relationships with suppliers and dealer networks, marketing, knowledge of customers and culture of innovation, Honda has built on and exploited this core competency of engine design which forms the basis of Honda’s entry into other product markets, thereby enabling the company to develop a range of quality products from lawn mowers and snow blowers to motorcycles, cars and trucks, in varied markets around the world. According to Baitmangalkar (2004), although all automobiles possess power trains / engines, the uniqueness of Honda’s engine design
In zeroing on a company’s core competency, using the above-listed criteria, Hamel and Prahalad (1990) identified Honda’s expertise in the design and manufacture of engines as its core competency. Based on the company’s underlying skills and capabilities identified in Farhoomand and Huang (2010) case study, namely Honda’s superior R&D, manufacturing techniques, strong relationships with suppliers and dealer networks, marketing, knowledge of customers and culture of innovation, Honda has built on and exploited this core competency of engine design which forms the basis of Honda’s entry into other product markets, thereby enabling the company to develop a range of quality products from lawn mowers and snow blowers to motorcycles, cars and trucks, in varied markets around the world. According to Baitmangalkar (2004), although all automobiles possess power trains / engines, the uniqueness of Honda’s engine design