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Case
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Reference no. 302-138-1
Published by: Asia Case Research Centre, The University of Hong Kong
Published in: 2002
Length: 27 pages
Data source: Published sources

Abstract

In the Harvard Business Review article ''The Core Competence of the Corporation'' (90311), authors CK Prahalad and Gary Hamel motivated the notion of core competence with a comparison of Nippon Electric Corporation''s (NEC) focus on ''core competence'' and General Telephone and Electronics Corporation''s (GTE) focus on ''businesses'' rather than ''competencies''. The article went on to become the best-selling HBR reprint in history and ushered in a wave of consulting and academic work that said core competence was the key to company performance. The authors predicted a bright future for NEC and other ''competence-based'' companies, and potential obsolescence for GTE and other ''business-based'' companies. The present case juxtaposes quotes from the article with a discussion of the evolution of NEC and GTE through 1999. It includes performance data on the two companies that allows for a critical assessment (and counterintuitive evaluation) of the core competence idea for the ten years preceding the publication of the article and the ten years following the publication. The teaching purpose is an introduction to core competence, importance of performance measurement. It is recommended that the students critically read the business literature.

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Abstract

In the Harvard Business Review article ''The Core Competence of the Corporation'' (90311), authors CK Prahalad and Gary Hamel motivated the notion of core competence with a comparison of Nippon Electric Corporation''s (NEC) focus on ''core competence'' and General Telephone and Electronics Corporation''s (GTE) focus on ''businesses'' rather than ''competencies''. The article went on to become the best-selling HBR reprint in history and ushered in a wave of consulting and academic work that said core competence was the key to company performance. The authors predicted a bright future for NEC and other ''competence-based'' companies, and potential obsolescence for GTE and other ''business-based'' companies. The present case juxtaposes quotes from the article with a discussion of the evolution of NEC and GTE through 1999. It includes performance data on the two companies that allows for a critical assessment (and counterintuitive evaluation) of the core competence idea for the ten years preceding the publication of the article and the ten years following the publication. The teaching purpose is an introduction to core competence, importance of performance measurement. It is recommended that the students critically read the business literature.

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