The term “Core competence” was first put forward in the 1990. In the book The Core Competence of the Corporation,collaborated on by famous management experts C.K. Prahalad and Gary Hamel. It points out, “Core competence is optimized knowledge and skills inside some organization, especially regarding how to adjust diverse manufacturing skills and optimize different technologies and skills.” In their view, core competence first of all should provide the enterprises with the potential to enter different markets. Secondly, core competence contributes largely to the value of customers of the ultimate products. At last, we should know, enterprises’ core competence should be something that can’t be duplicated and imitated by their rivals. Just as Zhang Ruimin, president of Haier Group said, “Novelty is the real core competence for Haier, which is no way difficult to be imitated by our rivals.” Besides the above characteristics, core competence owns other features. Firstly, core competence is the ability to collect.
In most cases, it is a collection of different abilities in groups. Few enterprises survive just for their dominant single ability. Core competence is an optimized and integrated knowledge and skills which are developed by the faculty in different departments through their continuous learning, acquiring knowledge, sharing knowledge and applying knowledge. This is also the reason it is not easy to imitate some enterprise’s core competence. Single things could be duplicated but the complex are harder to imitate. It is impossible to copy the core competence optimizing system and relative surroundings, let alone that core competence is invisible and untouchable, which only could be shown by the core products by way of its carrier. So there is no way (invisible and untouchable) or difficult (costly expenses) to purchase. As the conflicts of competition in the market increase in China, the competition between enterprises lies mostly in the competition of core competence. 1. Analysis on our Enterprises’Core Competence
We could say that core competence to China is a new problem as well as an old one. It is old for once enterprises enter the market, and want to survive the market, possession of core competence is a necessity; it is new for most of China’s enterprises to develop themselves away from the old-fashioned system, and gradually strengthen themselves in the immature market economy.