Your company’s Core Competencies (Prahalad & Hamel)

Do you know what your company’s core competencies are?

a – Make a list of your company’s strengths, keeping in mind in particular how they contribute to your company’s products and / or services.

b – Apply Prahalad & Hamel’s three test questions to them to identify which are core competencies. First an example from one of Apple’s strengths – design capability

  1. Does the strength provide consumer benefits? yes
  2. Is the strength difficult to imitate? yes
  3. Can the strength be leveraged widely? yes (across different devices)


Learn more from other company’s core competencies:

Brainstorm yourself what you think Honda’s main core competency might be, and how it is used to produce different products, then watch the Harvard Business Review video to see if they agree..


Do the same for Google, IKEA and Starbucks, then google it or click here.


Gain a deeper insight by categorizing your company’s core competencies:

Below is an exert from this article. Read through the exert, then decide whether the core competencies you listed for your company come from one or more of skills-knowledge / technical systems / managerial systems / values-norms

Skills and Knowledge Base

The first dimension, Knowledge and Skills, is the one most often associated with core capabilities and New Product Development (NPD).  This dimension encompasses both firm-specific techniques and scientific understanding.

Technical Systems

Knowledge that has been embedded in Technical Systems results from years of accumulating, codifying, and structuring the knowledge in peoples’ heads.  Such physical production or information systems represent compilations of knowledge, usually derived from multiple individual sources.

Therefore, the whole technical system is greater than the sum of its parts.  This knowledge constitutes both information and procedures.

Managerial Systems

This third dimension, Managerial Systems, represents formal and informal ways of creating knowledge–such as via sabbaticals, apprenticeship programs or networks with partners–and of controlling knowledge–such as incentive systems, reporting structures.

Values and Norms

Infused through the 3 aforementioned dimensions is the last: Values and Norms.  This represents the value assigned within the company to the content and structure of knowledge (e.g. computer engineering vs. marketing expertise; open source software vs. proprietary systems), means of collecting knowledge (e.g. formal degrees vs. experience) and controlling knowledge (e.g. individual empowerment vs. management hierarchies).


Drive growth:

  • Based on your analysis of your company’s core competencies, should anything be outsourced?
  • What new products or services within current target markets do you think your company’s core competences are good for?
  • Into which markets can your current core competencies allow you to switch?








Posted in MBA English.

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