Core competence of the corporation

Part A. Basics Concept and Idea

1. The difference between an uprising and declining companies arise from the strategy endorsed for their business. Successful companies should carefully study their markets (e.g. communications market for NEC), identify short and long term opportunities (e.g. overlapping computing and communication worlds), and determine important competencies that if acquired will set them apart from their competitors (e.g. for NEC to be able to serve both computing, communications, and components business). After identifying these core competencies, management should convey them to the entire organization. This allows the entire organization to be centralized for one clear goal and thus resources can be reallocated accordingly to achieve these competencies. Management should also convey the company’s pursuit to achieve these core competencies to the outside world which will help raise awareness of the companies brand and establish external collaborations.

Part B. Implications for Application

1. Japanese automobile companies operate with a more flexible mindset than their American counterparts. Their managers are not married to the idea of a business unit. A clear goal of producing affordable, practical, and durable cars has been set. This is supported by the fact there is neither a Ford nor Chevy among the top 15 in affordable small cars. Consumer reports are showing that 7 of the 10 lowest car models in reliability are domestic, while all of the top 10 models are foreign. Furthermore, Japanese car companies identified more energy efficient cars as a core competency. As a result, Toyota Prius became a blockbuster product. On the other hand, GM co-chairman expressed that GM will continue to build hybrid cars despite losing money on them. Clearly, they haven’t endorsed energy efficient cars as a core competency. Chevy, has launched the Volt, an electric car which despite its