Research for the Factors Effecting the Dynamic Management of the Enterprise’s Core Competence

董新瑩 楊 豐 李　竑

【Abstract】core competence is the basic drive for the enterprises sustainable development, the enterprise with core competence can keep a long-term excess profit more than others in the same industry. But with time passing by and the market situation changed, the original core competence of the enterprise should be out of season or even lost, thus, we must innovate it constantly and carry on the dynamic management.

【Keyword】 core competence dynamic management competitive advantage

【中圖分類號】F20【文獻(xiàn)標(biāo)識(shí)碼】A

As the globalization of economic development and the strike of the informationization wave, the competition between enterprises aggravates. The main competitive point originally is focused on the product only, then the quality, and now even the brand and the service etc., the enterprise has understood the importance of core competence. However, it still ignores the dynamic features of the core competence.

The summary for the dynamic management of the core competence

(一)Dynamic features of core competence

When Barney(1991) analyzed whether core competence was the source for the corporation to keep competitive advantage, he raised that, as the base of the enterprises competitive advantage, there were some general features of the core competence: Firstly, the core competence should be valuable. Obviously, it can improves the efficient of the corporation, can help the corporation do better than its competitors in creating value and reducing cost. Secondly, the core competence must be various. It is not the sufficient condition to create value, the creation of value is also based on that the enterprise can use diversified resource more efficiently than its competitor.Thirdly, the core competence cant be copied absolutely.Forthly, it is difficult to be replaced.

From the general features we can find it is hard to copy or replace the core competence, but it doesnt mean the core competence cant be copied forever. Objectively, with the development and advancement of the technique, the “core technique” depended by the core competence in the past is likely to become common technique at present, then the core competence will turn into a common capacity. Subjectively, if the enterprise itself lack the dynamic management of the core competence, it can also result in the lost of core competence.

(二)The conception of dynamic management of the core competence

The dynamic management of core competence means that the enterprise carries on a systemic whole course management and real time circular management to the identify, train, application, protection and innovation of core competence, to make sure it can keep ahead suitably to the changeable market situation as well as bring competitive advantage continuously to the enterprise.

Research for the effecting factors of dynamic management

of the core competence

The essential character of core competence is it can cause the enterprise to achieve more remarkable customer value than its competitor. The enterprises management condition, especially the important technical progress, the change of customer demands, the variety of competitors competition, will effect the primacy and adaptability of its core competence. If it cant discover the changeable situations in time, then immediately strengthen the core competence or confirm to establish a new one, the enterprise cant only hold its “core”, but also lose its competition. Specifically, there are five reasons why the enterprise should keep dynamic management on the core competence.

1.The macro circumstance of corporate management changes constantly

The economic globalization adds the uncertainty the enterprise faced, the coming information times speeds the transformation, for the unkind intense change, it is possible to make the competition by careful chosen trail the current demand.

When the external management environment changes, especially the industrys value increment framework occurred an ultimate alteration, it will make the precondition of the enterprises strategy implementation inexistent or occur revolution. The enterprise must make a strategy prospect and position again to be the foundation of strategy implementation—the core competence should be redefined

2.The development and progress of technique will affect the core competences primacy

With the development and progress of technique, there may be two situations: one is that the core competence will not be ahead due to the technical progress,

The enterprises core competence primacy is relative to its competitors, therefore, it cant rest easy after the forming of core competence but must realize that its competitors are trying to establish a better and more efficient one. The other is that the “core technique” it depended on in the past may has become a common technique now, then the core competence itself will turn into a general capacity. For example, during the 1990s, the core competence of the Apple--“good user interface” obtained a huge competitive advantage, but with the development of the software industry, it has become a basic capacity for all enterprises products.

3.The customers think a lot of the transfer of value demand

With the increasing income as well as the change of consumption character and fashion, the arrangement and content of the customers demand changes too. Todays world is full of individuality and diversity, the peoples consumption demand, conception are changing momently, the core competence as a factor to implement the value demand, if it cant be adjusted in time, it will be abandoned by the customers as expected. As with the rising of the green project conception, it makes our demand for products or service changed from pollution type(non-environmental protection type) to environmental protection type.

4.The enterprise inside itself manages slightingly or improperly on the core competence

Beside the external factors, the slightly or improperly management on the core competence inside the enterprise can also make it fallen. For example, the enterprise didnt pay high attention to the core competence, as a result, it lost the ability to form the elements of core competence, when it deals with a poor performance department or the key staff relative to the core competence quits, or due to the overstaffing and theres no specialized manager to direct the core competence as well as solve the communication obstacles between departments, thus, the core competence is dissevered artificial and loses its organismic integration, furthermore, the core competence will be weakened as a result of the lack of capital and personnel.

5.The dynamic transformation of the value chain

The dynamic transformation of the core competence also represents on the transfer of the value chain. During the 70s and 80s of the twentieth century, the worlds economy increased quickly for a long time, however, some manufacturers didnt enjoy the victory. To our surprise, its market possession rate didnt decline, but some of theirs even raised. The research claimed the reason that the industrys profit spot transferred on the value chain. Therefore, it is necessary for the enterprise to develop its core competence along the industry value chain, even absolutely give up the original one and establish a new core competence on the profit spot.

【Reference literature】

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