Business strategy Assignment Example | Topics and Well Written Essays - 2000 words

Business strategy - Assignment Example One of the reasons for this ambiguity can be the lack of a productive identification process (Whiddett and Hollyforde, 1999). Core competencies are often recognized in forms of intangible and tangible assets. Equivalent attention should be paid to both intangible and tangible competencies in order to gain sustainable competitive advantage (Bergenhenegouwen, Horn and Mooijman, 1996). This is because the value added and intangible contributions are much influential and critical (Hafeez and Abdelmeguid, 2003). It has also been pointed out that competitive advantage decreases as a result of the tangible assets. Thus, it can be said that the overall competency of an organization cannot be completed unless the personal competencies are also taken into consideration (Whitehill, 1997). This paper will analyze the core competencies in details. The various benefits and drawbacks of the concept will be explained. The paper will also incorporate expert opinions and critics from various researche rs and academics regarding concepts of core competencies as well as paradoxes. The next part of the paper will try to examine any relationship between concepts of core competency and Icarus paradox. Core competency Model Core competencies can be described as deep proficiencies enabling an organization to deliver quick and unique value to its customers. It symbolizes a firm’s collective experience and learning. It also helps in understanding the coordination of diverse manufacturing and production skills as well as integration of multiple technologies. This type of competency creates sustainable and long term competitive advantage for an organization and helps it in branching out into a broader category of related markets (Collis, 1991). The best advantage of having core competency is that it is very difficult for competitors to procure or copy. Understanding and evaluation of core competencies permit an organization to invest in various strengths which differentiates them and implement strategies for unifying the entire organization (Agha, Alrubaiee and Jamhour, 2012). The concept of core competency was first introduced in the framework of Prahalad and Hamel. They defined core competency as â€Å"An organisation’s major value-creating skills, capabilities, and resources that determine its competitive weapons.† (Hamel and Prahalad, 1990). According to this framework, competition cannot be considered as a market power in the long run. This can be derived from the fact that even though organizations have survived in tough global competition, they are all converging towards similar as well as formidable standards for quality, product cost and timeliness. Thus, managers now need to investigate their internal competencies as well as resources and capabilities for securing sustainable and long-term survival (Eden and Ackermann, 2000). According to the model, core competency can be recognized by application of three tests. These are: Firstly, with the help of a core competency, potential access to a wide market area can be gained. Secondly, core competencies significantly contribute in the creation of perceived consumer benefits of the end service or product. Thirdly, it is hard for competitors to copy or imitate as it involves complex harmonization of production skills and individual technologies. In other words, the understanding of the significance of the competence for competitive differentiation, whether the