Core Competencies

Abstract

Abstract Core competencies are collective learnings in an organization that result from a unique coordination of diverse production skills and/or the integration of multiple streams of technologies. They provide firms with a long‐term competitive advantage by allowing them to develop unanticipated products faster and cheaper than their competitors. Core competencies provide firms with access to a wide variety of markets, make significant contributions to the perceived customer benefits of the end products, and are difficult to imitate by the competition. Core competencies manifest themselves as core products, which are subassemblies and components that contribute to the value of a variety of end products. Battle for global leadership will take place on three planes: core competencies, core products, and end products. To compete effectively in the future, organizations will need to think of themselves as a portfolio of core competencies and core products, rather than as a collection of discrete businesses.