The Core Competitiveness of Enterprises-C.K.Prahalad & Hamel

In the article "Core Competitiveness", the author C.K.Prahalad takes GTE Company in the United States and NEC Company in Japan as examples, and reveals the source of competitive advantage by discussing their respective development trajectories.

In the early 1980s, GTE was already the main force in the information technology industry, while NEC was just unknown, but in a few years, NEC came from behind and completely left GTE behind. Why? The reason is that a few years later, GTE has actually become a company mainly engaged in telephone business, and its original related display technologies, such as Siwannian TV sets and switches, have all been handed over to the joint venture company for production, and semiconductors have also closed down. However, NEC has a clear strategic intention and structure. (NEC believes that computing, communication and component businesses will gradually overlap and interweave, and it will be difficult to separate them in the end. If a company has the core competitiveness to serve these three markets, there must be huge business opportunities), semiconductors will be listed as the company's "core products", and then many strategic alliances will be formed to acquire technology and quickly build the core competitiveness of enterprises at low cost. Such a clear strategic goal and high-level and efficient decision-making and communication have made NEC a world leader in the semiconductor industry, which not only consolidated the computer business, but also stepped out of the field of public exchange and transmission. Undoubtedly, NEC combines the core competitiveness of its three markets, and each combination will produce different products with the same core. The author also cited a 3M example to strengthen the author's understanding of the importance of core competitiveness. When the company produces diversified businesses such as newspaper stickers, adhesive tapes and camera films, it makes use of technical capabilities such as substrates, paints and adhesives, but only designs various methods to combine them. Like NEC, 3M's business portfolio looks extremely fragmented, but behind it are a few core competitiveness enjoyed by * * *. Looking at GTE and NEC again, the reason why they will be so different in a few years is that NEC can consider the problem from the perspective of "core competitiveness" and regard the enterprise as a collection of capabilities. However, GTE only regards enterprises as a collection of businesses, without a clear strategy and structure. Business units are loose, as if they are not related to each other. You can see how important a leader is here. He can decide to outsource the core business without consulting his subordinates, or he can establish a clear strategic goal and spread it widely at his subordinates.

In the article, the author used many seemingly tough sentences that people on earth like to emphasize the importance of leadership. The word "leader" sounds empty, but it is actually the most important existence. "These people should reflect. In many western enterprises, the problem is not that the leadership ability is not as good as that of their peers, nor that the technical ability of enterprises is not as good as that of Japan, but that the management of these enterprises is obsessed with an old company concept. " When the author told us that Chrysler only regarded the engine and power system as ordinary components and outsourced them all, which seemed to cut costs, but led to its increasing dependence on Mitsubishi and Hyundai, he asked loudly, "Honda has changed." Although Honda's R&D cost is high, it ensures its core competitiveness, integrates various engine-related technologies and develops world-leading products. It can be seen that the status quo of many enterprises also makes scholars sigh. For example, Schumpeter, who recently studied in Dida, emphasized innovation. Entrepreneurs do not rely on technology and test capital to contribute their own profits, but start a business, innovate and be unprofitable. According to Schumpeter's point of view, you planted sugarcane and later cotton on this land, so you are an entrepreneur. But if you continue to grow cotton, you will no longer be an entrepreneur and your profits will gradually disappear. Leaders should not be complacent, but also have keen insight. The earth in today's strategy class also remembers the tutor's words: "All leaders want to change their subordinates, but it is actually impossible, because it is difficult to change themselves, but the important thing is to change themselves."

Before going deep into the core competence, let's ask where the root of competitive advantage lies. The short-term competitive advantage lies in the cost-effective characteristics of existing products, and the long-term competitive advantage lies in whether enterprises can build core competitiveness at lower cost and faster speed than competitors, and these core competitiveness will give birth to unexpected new products. Therefore, it is not surprising that Yakult produces facial masks. Yakult's probiotics and anti-oxidation of membrane, a cross-border skin care industry in fujifilm, are exactly what skin care needs.

So, what is the core competence and core competitiveness that the author has been emphasizing, and what is the title of this article?

Core competitiveness is not the input of resources, the allocation of enterprise costs, or vertical integration, but the complex integration of company technology and production skills. How complicated is it? It is an institutionalized dependence and an interrelated knowledge system, which is manifested in the ability of the whole enterprise to act, and in the long run, it is the ability of the organization to have unique consumer value. Complexity lies in "uniqueness" and "systematicness". The system is that it is a collection of organizational knowledge and the result of collective learning, and it can provide users with unique core values. The uniqueness lies in that when an enterprise has a management system that matches the overall output, it can't imitate it at all, and it doesn't know where to start if it wants to imitate it.

The author also made a lovely tree model. Look at that tree. The flowers, leaves and fruits you see first are only the final products of the enterprise. The shoots it grows are the parent business unit, but the branches of the tree can be used for carpentry and are the core products. So what do these things live on? That is the core competitiveness of an enterprise! Therefore, when you judge an enterprise only by the final product, it is somewhat narrow. You have to look deep, see the roots of the enterprise, and see the possible development in the future, but this also needs to be watered frequently, because knowledge will die if it is not used.

Finally, the author teaches us three ways to distinguish core competence: first, do you think core competence can provide convenience for companies to enter multiple markets; Second, whether it has made a significant contribution to the value of the final product to customers; Third, whether other enterprises are difficult to imitate.

Meet these three points, congratulations, this is your core competitiveness. However, in order to better cope with and cultivate core competitiveness, it is necessary to build the most favorable organizational structure. The author warmly reminds us that we can't use divisions to engage in Olympic mathematics. Compared with the autocratic division of labor system, The Matrix looks better.

"The skills that constitute the company's core competitiveness must be gathered in open-minded people. If they are narrow-minded, people will not realize that they have the opportunity to combine other people's expertise with their own expertise in a novel way. "

The earth wants to end this small summary of core competence with this sentence of the author. Management sounds very abstract, but the reason why I still choose management during my graduate study is because many conclusions, truths, observations and truths in life in management are the same. The earth often feels "ah, so do people". Although management is studying enterprises, it is also studying people. What did you learn after reading this article? In addition to understanding academic theory, I think we should all be open-minded people and have core competitiveness. What is your core competitiveness? It's not too late to train from now on.