The document discusses the concept of core competencies, which are the skills, assets, and capabilities that give a company its competitive advantage. Core competencies fuel innovation and differentiation. Examples provided include Sony's core competence of miniaturization and Federal Express' competence in logistics management. Core competencies are enhanced over time and simplify make-or-buy decisions. Core products are the tangible evidence of core competencies and contribute to customer benefits. By leveraging core competencies across business units, companies can enter new markets. The risks of ignoring core competencies include over-reliance on suppliers, failure to invest in future competencies, missed growth opportunities, and weakened competencies over time.

2. COMPETENCIES
CORE

3. Founder of the concept of
CORE
COMPETENCE
C.K.
PRAHLAD
GARY P. HAMEL

4. • CORE COMPETENCIES ARE THE SKILLS,
CHARACTERISTICS, AND ASSETS THAT SET YOUR
COMPANY APART FROM COMPETITORS. THEY ARE
THE FUEL FOR INNOVATION AN THE ROOTS OF
COMPETITIVE ADVANTAGE . For example,
CORE
COMPETENCIES
CORE
PRODUCT
END
PRODUCT
At Sony – benefit is POCKETABILITY core competence
is MINIATURIZATION
At Federal Express – benefit is ON TIME DELIVERY
core competence is LOGISTICS MANAGEMENT
At Motorola – benefit is UNTETHERED
COMMUNICATION core competence is WIRELESS
COMMUNICATION.

5. Why Competencies?
• Even good marketing wont make a “me too”
firm competitive in the long run.
• Competencies are enhanced with time.
• Make or buy decisions are
simplified.
• Non-competencies can be
supplemented with strategic
alliances and licensing
agreements.

6. Competencies to Core
Products
• Core products are the tangible evidence of
our core competencies. They are key
contributors to the customer benefits
received from the end product.
– Honda: Small gas engines
–Canon: Desktop laser printer engines

7. BUSINESS
3
BUSINESS
1
BUSINESS
4
BUSINESS
2
CORE PRODUCT
1
COMPETE
NCE 2
CORE PRODUCT
2
COMPETE
NCE 1
COMPETE
NCE 3
COMPETE
NCE 4
1 2 3 4 5 6 7 8 109 1211
END PRODUCT
• From these core products
come the new strategic
business units. These SBU’s
can be in completely
separate markets.
• These businesses each have
end products that contain the
core products.
• In each SBU, outsourcing
may be considered for
everything except the core
products and competencies.

8. Exercise: Identifying Your Core
Competencies
•Compile a list of
capabilities.
•What do you excel at
?
•Think of your most
skilled employees.
•What products have
been your past
winners?

9. Competitive Advantage
•Short-term market
share can be won by
anyone with a good
idea.
•Race to get products
on the shelf.
• Long-term success
involves competency
structured organizations,
innovation, and market
consistency.
• Same core products,
integrated into new end
products, creating new
markets.

10. RISKS OF IGNORING CORE
COMPETENCIES
• The lack of core competence perspective
can desensitize a company to its growing
dependence on outside suppliers of core
products.
• A company focused only on end products
may fail to invest adequately in new core
competencies that can propel growth in the
future.
• Opportunities for growth will be needlessly turned down.
• As a company divisionalies and fractures into ever smaller business
units, competencies may become fragmented and weakened.

11. RISKS OF IGNORING CORE
COMPETENCIES
 A company that fails to understand the
core competence basis for competition
in its industry may be surprised by
new entrants who rely on
competencies developed in other end
markets.
 Companies insensitive to the issue of
core competence may unwittingly
relinquish valuable skills when they
divest an under-performing business.

13. A young
graduate from a
small town in
Rajasthan,
Churu declined a
bank job
because he
wanted to do
something on his
own, something
big. Today,
NKC’s Jaipur
Rugs is India’s
largest
manufacturer of
hand-knotted
rugs, with an
annual turnover
of above ₹ 122
crore annual
turnover.
WEAVER

14. Once a person becomes
selfless in his true sense,
then abilities like empathy,
love, integrity and
simplicity bloom. These
are abilities that have led
to the inception and
evolution of Jaipur Rugs
and these abilities, put
together, always lead to
the creation of something
that’s flawless and
constant.
Thinker
Live a life worthy of
Dignity and respect

15. NKC’s Transformational
Leadership approach has
created valuable and positive
change in the employees of
Jaipur Rugs as well as
artisans at the grassroots, by
stimulating and inspiring
them to both achieve
extraordinary outcomes and,
in the process, develop their
own leadership capacity.
Doer

16. One
Rug
One
story

18. THANK YOU
NAME- YASH BHATI
TOPIC- CORE COMPETENCE
SUBMITTED TO-
S.P.S.BHADU (HEAD OF
DMS JNVU)
DATE- 27/3/2015