Core competence matters : Preparing for a new agenda

Abstract: Ljungquist, Urban (2007). Core Competence Matters: Preparing for a New Agenda. Acta Wexionensia No. 121/2007. ISSN: 1404-4307, ISBN: 978-91-7636-567-0. Written in English. The core competence concept describes how large companies can prosper and achieve competitive advantage. It is a well-known concept in the strategy domain, frequently practiced in organizations and cited in the literature. Despite this, recent research indicates that in-depth understanding of the concept is scarce. In this thesis, a few shortcomings of the concept are recognized: The vagueness of the original definition, divergence of the existing literature, and invalid appliance. Straightforward core competence identification and verification processes are put forward, applicable to both research and practice. The processes aim at advancing beyond mere identification. Three different core competencies were identified and verified in the empirical part of this thesis. The core competencies were possible to separate through differences in the various influences from competencies, capabilities and resources. The core competencies were also possible to arrange in a complexity continuum, from a compound and highly integrated core competence to a simple and technology-based one, with the third one, a service-based core competence, representing moderate complexity. The two most complex core competencies were, in general, influenced by competencies and capabilities to a larger extent than the simpler core competence. Resources mainly influenced the goods-producing core competencies. The empirical findings of this thesis show that by acknowledging the specifics of the characteristics of competencies, capabilities and resources and their influences, in conceptual and empirical discussions and applications, core competencies can be identified and verified. Furthermore, their influences provide the keys to managing core competencies. A new core competence agenda is proposed. The agenda includes core competence management, which is of particular value to organizations in need of change, for example those facing dynamic business environments, where vital activities and processes – including core competence – must be continually renewed. The agenda is feasible for future core competence research as well, since it alters the research domain, and advocates specificity, convergence and validity.