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Core Competence of Sharp Corporation - Essay Example

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Core Competence of Sharp Corporation

From this paper it is clear that there were abundant literatures providing theoretical and empirical support justifying that competitive advantage is derived from imperfectly tradable, imperfectly substitutable and valuable assets. The idea of portfolio approach encouraging diversification into unrelated areas that flourished in 1960s and 1970s lost its fervor to RBV approach advocating diversification into related areas. RBV approach also was critical of multi divisonalisation of a large company that led to corporate fragmentation and short-termism undermining the development of core competencies and innovations. Core competency exploitation led to vertical integration in large companies to achieve competitive advantage. But of late vertical disintegration is being attempted in the globalization tendencies which offer wide opportunities to delegate to external suppliers with highly specialized expertise resulting in more pronounced core competency approach for the given company. As the paper highlights Hammel and Prahalad in their book “Competing for the future”assert that companies should look forward to the share of future opportunity share rather than current market share. They say that successful enterprises will reshape their industries rather than themselves by building upon their unique core competencies without building upon current product lines and that this will lead to creation of new competencies. They advocate new strategy which requires four approaches namelyunderstanding of the shape of future competition; process by which to gauge tomorrow’s opportunities; energizing the company from top-to-bottom to prepare for the future; and  overtaking the competitors and arrive at the future first without assuming undue risks.  ...Show more
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Summary

This essay declares that since the advent of 1990s, it has been widely regarded that competitive advantage of a company depends upon how well it exploits its core competencies as opposed to the ideology of diversification into unrelated areas based on portfolio basis. …
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