Free «Procurement Outsourcing» Essay Sample

A core competency is considered as something unique that an organization possesses or does, to enable it to attain a long lasting competitive advantage (Prahalad 79). It is viewed as a specific factor that is central to the manner in which the organization or its employee works. A core competency can occur in various forms, such as subject or technical matter know-how, close relationships with suppliers and customers and/or reliable process (Prahalad 79). This can also include culture or product development, such as good market coverage, employee dedication or the best human resource management.

Core competencies are specific strengths relative to other companies within the industry that generate the main basis for the creation of added value (Leonard-Barton 113). It is the collective learning within the organization and it entails coordinating varied production skills and integrating diverse streams of technology. For instance, for a company dealing with the production of electronic equipment the main areas of expertise could revolve around the design of the electronic circuits and components. For a software company critical skills could be about the utility and simplicity of the program or rather the production of high quality software. For instance, Apple applies innovativeness in its product designs, as well as the production of user friendly designs and interfaces, as core competencies to allow it attain a competitive advantage. In addition, this company takes heed to its customer relations as it seeks to maintain the close relationships with its customers and suppliers (Hujin 32). Walmart, on the other hand, majors in the sale of its groceries at a low cost, which has enabled it to attract more customers, something the company considers as one of its key competencies (Hujin 34).

However, it is important to note that core competencies are not fixed. They adjust in response to the changes that happen in the company’s environment. As the company evolves and adapts to the emerging opportunities and conditions, its core competencies will also have to change and adapt. They are basically flexible and evolve with time.


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