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The Two Cs of Success: Core Competency

INNOVATION / MICHAEL SCHRAGE

May 16, 1991|MICHAEL SCHRAGE

Quite clearly, one of the reasons that a Toyota and a Honda are so successful is that they intimately understand how to nurture, develop and enhance their core competencies in manufacturing. When Ford decided to draw upon its core competence in design, it enjoyed tremendous success with its Sable and Taurus lines.

"The global competitive battles of the 1980s were won by companies that could achieve cost and quality advantages in existing, well-defined markets," Prahalad says. "In the 1990s, these battles will be won by companies that can build and dominate fundamentally new markets."

Where will these new markets come from? Not from examining the entrails of old markets but by creative blending, mixing, fusing and extending core competencies. I have no doubt that the core competency perspective will be extended to questions surrounding the core competencies of nations.

The competency perspective is powerful not only because it's simple but because it asks us to do two things we know we need to do better: build on our strengths and learn from our weaknesses. Organizations that do those things well can't help but succeed in the market.

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