Core Competence of Sharp Corporation - Essay Example

This is also called Resource-Based View (RBV). 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. (Christensen 2005) Hammel and Prahalad (1994) 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 namely (1) understanding of the shape of future competition; (2) process by which to gauge tomorrow's opportunities; (3) energizing the company from top-to-bottom to prepare for the future; and (4) overtaking the competitors and arrive at the future first without assuming undue risks.

They add that it takes a company 5-10 years or more to achieve leadership position in a given core competence and that if a company does not know how to leverage their existing core competencies, it will be overtaken by the others in the market. A core competence is defined as a combination of skills and technologies that would enable a company to offer an added benefit to their customers. For instance for the benefit of pocketability, core competence has been miniaturization for Sony and for the benefit of on-time delivery, logistics should be the core competence as in the case of Federal express.

In order to create a culture of core competence in an organization, it should engage itself in five key competence related tasks. (1) Recognizing the existing core competencies ; (2) Setting up a core competence acquisition program; (3) Developing core competencies which is a long-term commitment; (4) Deployment of core competencies; and (5) Protection and preservation of core competencies. About Sharp CorporationSharp Corporation is well known for its innovative products ever since its inception in 1912 with two employees.

Its first ever product was snap belt knuckle which the founder Tokuji Hayakawa had himself designed. Its first ever innovative product was "ever sharp" mechanical pencil invented by its founder in 1915 and the company has been named after the pencil "sharp". Today it employs 57,600 (as on April 30, 2007) people worldwide and is at present is a leading manufacturer of liquid crystal displays (LCDs) and digital technologies. It has got the widest range of sophisticated consumer electronics,