THE CORE COMPETENCE OF AN ORGANIZATION
A resource based view of strategy, enables an organization to understand
how it can achieve a competitive advantage from its resources. (Barnery 1986).
This approach focused more on the role of external environment of an organization.
However, there has been a substantial change of view over the last 25 years by
prahalad and hamel in an Harvard business review article in 1990 arguing that
the key basis of a firms strategy should be based more on its internal environment
rather than its external environment, and most especially its resources and
capabilities in which it posses.
Prahalad and Hamel (1990), also suggested three-analytical/question tool approach
test for identifying the core competence of a firm.
Range of application: the core competence should be able to provide
products that would provide potential access to new market abroad,
Imitation: the core competence should be difficult to imitate by its competitors/rivals.
Relevance: the core competence should be able to provide an
added advantage to the end-users.
These approaches have been able to gain grounds over the years mainly
because of the rapid instability of firm’s environment.
Honda initially started producing small engines for attachments and
bicycles then later moved on to motorcycles, scooters and more recently to jet
planes Etc. Honda has now become a major producer of automobiles( Honda and Acura
automobiles) over the years. However, the basis of Honda’s strategy cant be
categorised under the basis of its products because it has been able to
diversify into a wide range of engine products such as marine motors, ground
tillers, snow blowers. Etc.
Hondas strategy can’t be said to be its products or markets but its
capabilities. Honda’s core strategy is based on its expertise in the development
and manufacturing of engines and most especially its internal combustion of
engines which it has achieved outstanding performance in terms of technology,
fuel efficiency and environmental friendliness.( Grant 2010).
Honda USA recently partnered with the French software giant Dassault Systems
on planning structure in other to improve its time to market and productivity
which included a new model process development (NMPD) project (Brune 2017).
In 2015, Honda’s eight automobile plants in North America manufactured
over 1.86 million vehicles, which set a record for all-time auto production in
North America. (Markham 2016). In addition, in 2016, Honda manufactured almost
70% of its products in the America which was said to have been the second most
of an automobile company in America. (Honda America 2018)
Honda’s North American production plant is known for its production
flexibility which been one of its reasons behind its success. (Honda 2016). One of the missions of Honda is to be able to
meet and satisfy the change in consumers taste. In 2015, Honda added a new line
of production (civic, HR-v and pilot) in North America. Furthermore, in 2017,
Honda opened another production plant for the production of the Acura NSX by
including production in Marysville, Ohio in addition to the existing production
in Alabama. Also, Honda has eight automobile plants and operates 18 car-manufacturing
facilities in North America, with a production capacity of two million Honda
and Acura automobiles annually with the help of both domestic and international
sources parts. (Honda Canada media room 2016).