Prahalad and Hamel (1990)

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Prahalad and Hamel (1990) - The Core Competence of the Firm

Firms need to be core competency focused. They need to choose a goal and work towards it in every aspect of the business. For this the firm needs a strong strategic direction.

A firm with a developed core competence will enable greater responsiveness to the changing environments, markets and tastes.

Managers need to spend wisely, rather than spending more. They need to consider the "why" of every decision made and whether each decision will work to continually enhance the core competence of the firm.

The core competence will not deteriorate with use, but it does need to be upgraded. People and knowledge are assets to a company and since they are always changing, so does the core competence.