Hamel and Prahalad's Concept of Core Competence Essay

Hamel and Prahalad's Concept of Core Competence - Essay Example Formerly, the diversification of the corporation would simply direct its business units towards particular end product markets and order them to become leading outlets of the business, but with the ever changing market boundaries, the targets proved to be to elusive with their sustained ‘capture’ limited. Only a few companies have been able to adapt to the ever changing dynamics and thus have been able to capture the existing markets through their inventing of new markets, their quick entry into new emerging markets and, more dramatically, in their shift in patterns on the selection of customers in the already established markets. Therefore, the critical task that various corporate management face, is the creation of an organization that is capable of infusing their different products and services with efficient and effective functional ability or improving their profiles with the creation of product and services that their customers need but have not yet envisioned (Gra nt, 2005, 182). Such a task is difficult since it ultimately requires the radical restructuring the management of these companies. This in essence means that the top management of various corporations or companies must accept and assume their role and responsibility in the decline of their companies’ competitiveness. The theory and practice of the ‘Western’ type of management is blamed on the creation of a ‘dragging effect’ on the forward movement of companies. It is thus imperative that the principles of management be changed /reformed (Grant, 2005, 182). Core competency can be described as ‘a specific factor that, through the business’ point of view, is centrally responsible for the way the business and by extension its employees perform their duties. Through its utilization, it can fulfill the following aspects: - it cannot be imitated easily by business competitors, it can be used to put leverage on a wide range of products and marke ts and its core importance is that it must contribute to the benefits experienced by the consumers. Therefore, it can take a myriad of forms including customer services, technical/subject matter knowledge and effective and efficient management of the business. It may include product enhancement, good marketing skills, efficient Human Resource Management among others (Nitschke, 2011, 23). They enable better coordination of the diverse production skills through the integration of different technologies, good communication, good interpersonal skills and an involved and deeply committed work attitude. Consequently, a core competence is achieved through the application of a specific and unique set of skills and or production techniques that will, in the end, deliver the expected value to the customer. This in turn, enables the discovery and exploitation of newer varieties of markets. As illustrated by Professor Prahalad and Hamel, core competencies usually lead to the creation or the cor e products of a business and in themselves can add many more products for their end users. These core competencies are enhanced through continued improvements by the companies over a period of time. This build up of the core competencies