core competence – The combination of a strong technology platform…

Question Answered step-by-step core competence – The combination of a strong technology platform… core competence –  The combination of a strong technology platform and entrepreneurial management skills, within a multibusiness firm, that leads to the creation of new businesses whose learning feeds back into and strengthens the platform.                Managers often use the idea of a competence to denote a type of capability. However, the original meaning of the term is much more complex and far-reaching. The central idea is that multibusiness firms may have one or more technological resources or capabilities that can serve as a foundation for new business development. Multiple business units share and develop these capabilities jointly to achieve economies of scope in the growth of the technology platform. However, the scale and complexity of developing a core competence are much greater than simple diversification. Core competence implies both a technology platform shared by existing businesses and the ability to leverage the platform to develop new businesses. The firm’s growth path is strengthened as novel technologies from these new units stimulate further innovation, which in turn leads to more entrepreneurial activity. The entrepreneurial dimension of core competence is therefore critical for understanding the concept’s power for corporate growth. Core competence thus combines two types of corporate contribution to the business: technological capability and entrepreneurial skill. Both of these are necessary and neither is sufficient for technology- based diversification. Sustaining such an expansion path is a key problem for diversified firms, especially as technology platforms mature and new business opportunities come and go. One of the best examples of a firm that has developed and exploited a core competence is 3M. 3M is known for the enormous number of innovations it has developed in advanced materials, especially adhesives. A notable example of the corporation’s diversification into unusual and unusually successful applications of adhesives technology is Post-it notes. But this product is just the tip of a huge iceberg of innovation. The combination of 3M’s highly generative technology base in mate- rials and its promotion of new businesses tied to this base has been a major source of growth for the firm over the past 30 years.  What are the necessary conditions for the development of a core competence as defined above. Answer in terms of the following:Governance (platform charter if any, goals and discipline) and organization (degree of independence from other units, internal structure)Mode of capability development (acquisition vs. internal development)  Business EMBA 451 Share QuestionEmailCopy link Comments (0)