Intel Core Competencies Case Study

A Term Paper on

CORE COMPETENCIES

Presented to

Professor. Kishore Thomas John

On

September 16,2014

By

Akhil Vasu

P14164

PGDM-B

Table of Contents

Executive Summary………………………………………. 1

Introduction……………………………………………….. 2

Core Competencies……………………………………….. 3

EXECUTIVE SUMMARY

In this report I have explained the concept of Core Competency and how it creates a competitive advantage for a company. I have also mentioned the importance of core competencies along with the ways of identifying a core competency.

INTRODUCTION

The term core competency was coined by Dr.C.K Prahalad and Prof. Gray Hamel in 1989. They compared various Japanese firms with their American counterparts. Competence based strategy is part of an

Customers need to perceive a consistent difference in important attributes between the products and services of the competitors and those of the producers. Intel’s core competence lies in developing an array of microprocessors in a very short time. With the proved attribute of quality and speed against other competitors, this core competency provides a distinctive competitive advantage.

Last but not least, core competencies make a company focus on extensive R&D.

LOSING CORE COMPETENCIES

While looking to cut cost by outsourcing a product or service to a different organization companies especially big ones have to take care and extra precautions. In the past, Chrysler used to view engines in cars as just another component and outsourced it to various Japanese companies. Outsourcing is thus a two bladed sword if not handled properly. While outsourcing gives a short term competitive advantage it contributes very little in developing people skills which helps in creating core competency.

Sometimes lack of a clear framework and lack of forecasting the state of the market can make companies forsake attractive opportunities. It often arises from a lack of clear insight in the core competencies and the core product of a business. It is important to recognize the importance of core competencies in entering an emerging market.

CASE

Before PC copiers became available in 1982, copying was done on a departmental basis within companies and through commercial copy centers. Copy centers served a range of copying needs, from small copying jobs to large, high speed/high volume projects involving document preparation. Satisfaction of copying needs depend on a copier’s price, quality, performance, features, maintenance, and after-sales support. Those factors became the basis for defining various market segments. The most profitable segment was of course the large volume one in which Xerox was the market leader. Thus a gap existed between the companies’ performance and the opportunity in terms of small volume copier market. In other words companies around the world were placing a high value on getting a small, relatively inexpensive personal copier and thus an easy-to-use, durable, low priced, and maintenance-free small copier awaited innovation. Canon approached the problem by assembling a task force of 200 people and developed a series of core products; disposable cartridges, instant toner fusers, and other components to decrease the size as well as the cost. Thus, an entirely new product was born which was reliable and required less servicing. This product was developed and launched in less than 3 years, which really put Canon towards becoming a competent player in printer