Question

Review core capabilities. Core capabilities are critical issues in operations management. Why are core capabilities an asset? Are there any instances in which a firm’s core capabilities can be a liability rather than an asset?

Answer 1

The business activities performed by a company at a consistently high level of competency which is most important for the company to remain competitive in their marketplace. They are something in which the company is best at. Such as some companies may be good in logistics management, some may be good in the efficient manufacturing of products, some may be good in marketing. It is very important for the companies to incorporate the core competencies in-house and shouldn't share with the external organization otherwise the core competencies will be lost.

Core competencies is an asset to the time, market dynamics do not change. There is an example of Nokia which had a core competency in manufacturing a durable and efficient featured mobile phones but after the introduction of smartphones, the market of the feature phones disrupted and the core competency of the Nokia became a liability because they couldn't perform well in the smartphone market.