Estrategia

www.hbr.org

The Core Competence
of the Corporation
by C.K. Prahalad and Gary Hamel

Included with this full-text Harvard Business Review article:
1 Article Summary
The Idea in Brief—the core idea
The Idea in Practice—putting the idea to work
2 The Core Competence of the Corporation
15 Further Reading
A list of related materials, with annotations to guide further
exploration of thearticle’s ideas and applications

Reprint 90311

The Core Competence of the Corporation

The Idea in Brief

The Idea in Practice

Diversified giant NEC competed in seemingly disparate businesses—semiconductors, telecommunications, computing, and
consumer electronics—and dominated
them all.

CLARIFY CORE COMPETENCIES

How? It considered itself not a collection of
strategic businessunits, but a portfolio of
core competencies—the company’s collective knowledge about how to coordinate diverse production skills and technologies.
NEC used its core competencies to achieve
what most companies only attempt: Invent
new markets, exploit emerging ones, delight customers with products they hadn’t
even imagined—but definitely needed.

COPYRIGHT © 2003 HARVARD BUSINESS SCHOOLPUBLISHING CORPORATION. ALL RIGHTS RESERVED.

Think of a diversified company as a tree:
the trunk and major limbs as core products,
smaller branches as business units, leaves
and fruit as end products. Nourishing and
stabilizing everything is the root system:
core competencies.
Focusing on core competencies creates
unique, integrated systems that reinforce
fit among your firm’s diverseproduction
and technology skills—a systemic advantage your competitors can’t copy.

When you clarify competencies, your entire
organization knows how to support your
competitive advantage—and readily allocates
resources to build cross-unit technological
and production links. Use these steps:
Articulate a strategic intent that defines your
company and its markets (e.g., NEC’s “exploit
theconvergence of computing and communications”).
Identify core competencies that support that
intent. Ask:
• How long could we dominate our business
if we didn’t control this competency?
• What future opportunities would we lose
without it?
• Does it provide access to multiple markets?
(Casio’s core competence with display systems let it succeed in calculators, laptop
monitors, and cardashboards.)
• Do customer benefits revolve around it?
(Honda’s competence with high-revving,
lightweight engines offers multiple consumer benefits.)

Forge strategic alliances. NEC’s collaboration
with partners like Honeywell gave it access to
the mainframe and semiconductor technologies it needed to build core competencies.
CULTIVATE A CORE-COMPETENCY
MIND-SET
Competency-savvy managers workwell
across organizational boundaries, willingly
share resources, and think long term. To encourage this mind-set:
Stop thinking of business units as sacrosanct. That imprisons resources in units and
motivates managers to hide talent as the
company pursues hot opportunities.
Identify projects and people who embody
the firm’s core competencies. This sends a
message: Core competencies arecorporate—
not unit—resources, and those who embody
them can be reallocated. (When Canon spotted opportunities in digital laser printers, it let
managers raid other units to assemble talent.)
Gather managers to identify next-generation competencies. Decide how much investment each needs, and how much capital and
staff each division should contribute.

BUILD CORE COMPETENCIES
Once you’veidentified core competencies,
enhance them:
Invest in needed technologies. Citicorp
trumped rivals by adopting an operating system that leveraged its competencies—and let
it participate in world markets 24 hours a day.
Infuse resources throughout business units
to outpace rivals in new business development. 3M and Honda won races for global
brand dominance by creating wide varieties
of...