Outsourcing non-core assets and competences of a firm using analytic hierarchy process

Abstract

This paper provides a structured framework for evaluating the firm assets and competences using a two stage analytic hierarchy process (AHP). One distinctive characteristic of this framework is that relationship between firm competence and intellectual assets is established and a set of six attributes related to uniqueness and collectiveness are identified to help identify the core competence of a company. Using a balance score card type financial and non-financial procedure, these attributes are subsequently employed for isolating the competence and tangible and intangible assets of a UK manufacturing company. Our analysis illustrates that the intellectual assets such as marketing knowledge, design skills, manufacturing skills and customer relationship those usually ignored within the balance sheet of a company have been perceived relatively important than the tangible assets such as space and equipment. We argue that results based on AHP-based quantitative analysis would help a company to make more informed strategic management decision concerning further investment for competences and key assets development, and outsourcing non-core assets and competences.