Core competence is the enterprise with unique, consumers can bring special utility, make the enterprise long-term competitive advantage in a market ability of internal resources, is the corporation competitive advantage and distinguish it from the competition of knowledge, is the company's establishment and development in the process of development of a system of knowledge and complementary assets is the foundation of company competition ability.
It is the related diversification of the enterprise around the core competence. For example, Canon has successfully entered more than 20 market areas such as photocopier, laser printer, camera, imaging scanner and fax machine with its core capabilities in optical lens, imaging technology and micro-weight control technology, and has achieved a certain market position.
It is the potential and level of enterprise development, the comprehensive embodiment of existing business strength and the ability to effectively deal with multiple industry activities of different nature. Otherwise, it will not only fail to gain a dominant position in the new field, but also make the original business field affected and directly threaten the survival of the enterprise.
First of all, core competence is the key way for an enterprise to strengthen its adaptability to the external environment under the condition of knowledge economy. It not only guarantees the stability of enterprise diversification, but also can enhance the flexibility of enterprise operation by adjusting its external factors. Secondly, core competence can effectively reduce the risk of diversified business. In the process of developing new products and new markets, the combination of old and new organizational resources will produce a synergistic ability to resist market risks. Therefore, enterprises carrying out diversified business must rely on core competence, and continuously provide customers with competitive products through vertical improvement or horizontal expansion of core competence, strengthen development advantages in new and old fields, overcome risks, and achieve the balance between risks and benefits.
The core capability of an enterprise is hierarchical and phased, which requires continuous development. Therefore, the relationship between diversification and the development of core competence is actually a dialectical and unified relationship. On the other hand, successful diversity strengthens core competencies. To be specific, it is mainly r