The Formation, Measurement And Evaluation Of Corporate Core Competence

In the context of economic globalization,how to acquire competitive advantage and maintain sustainable development has been a hot topic that theorists and entrepreneurs have been debating and practicing. This paper thinks that core competence is the fundamental source of corporate competitive advantage and sustainable development. Therefore,a firm that wants to win in fierce market competition,must know itself correctly and see how to acquire core competence.This paper consists of three parts: Part one is about the construction of corporate core competence theoretical system and the construction and empricial study of"Four-factor Structural Model". Part two is the case study of GE's core competence. And part three is the enlightment of GE's core competence on Chinese enterprises.Firstly, on the basis of analysis on current domestic and foreign research and formulation and evolution of GE's core competence, the paper has put forward the four factors– innovation, portfolio, management and governance which influence corporate core competence and has constructed the"Four-factor Structural Model"of corporate core competence (or GIMP Model)Secondly, this paper has made an empirical study of the"Four-factor Structural Model". The results show that there are significant positive correlations between the five latent variables - innovation, portfolio, management, governance and corporate core competence. From the total effects of latent variables on corporate core competence, portfolio has the greatest effect on corporate core competence, while the effects of innovation, management and governance on corporate core competence are not significant.Meanwhile, this paper devides GE's development for more than one hundred years into three stages - Diversification Era,Centralization Era and Globalization Era. It summaries the formation and evolution of GE's core competence and also measures and evaluates GE'core competence at three different stages.Lastly, in light of the present situation of Chinese enterprises and on the basis of both empricial and case studies, the paper has proposed ways and methods to construct and enhance corporate core competence of Chinese enterprises. Firms should cultivate their core competence from the perspective of portfolio, innovation, management and governance. This is because portfolio is the natural result of corporate core competence and leads the direction of corporate development. As it is said that doing the right thing is far more important than doing things in the right way, as long as portfolio is reasonable, a firm is half successful. Innovation is the most active factor in corporate core competence and the spirit of corporate survival and development. Management is the execution basis of corporate core competence. And governance is the organizational guarantee of corporate core competenceResearch on corporate core competence, especially on GE's core competence has made important enlightenment on Chinese enterprises. GE's successful story tells us that only by cultivating their own core competence,can these enterprises maintain strong momentum and energy in development and thus gain a competitive edge and keep growing and developing in a sustainable way.