Skip to content

CS Professional · Strategic Management and Corporate Finance · Analyzing the External and Internal Environment

Which statement best distinguishes a core competence from an ordinary resource of a firm?

A core competence is a bundle of integrated skills and technologies that cuts across businesses, delivers value customers perceive, and is hard for competitors to copy. It differs from an ordinary resource such as a plant, which can usually be bought or replicated.

  1. AA core competence is any physical asset owned by the firm
  2. BA core competence is a bundle of skills and technologies that spans businesses, is hard to copy and adds customer-perceived valueCorrect
  3. CA core competence is a short-term cost saving obtained through outsourcing
  4. DA core competence is the firm's statutory compliance record

Explanation

Following Prahalad and Hamel, a core competence is collective learning and integrated skills that give access to many markets, contribute to customer-perceived benefit and are difficult for competitors to imitate. A physical asset or outsourcing saving does not meet this.

Did you get it right without looking?

One question tells you little. A timed set on Analyzing the External and Internal Environment shows your real accuracy, how long you take and where you lose marks.

Practise Analyzing the External and Internal EnvironmentFree diagnostic mock

More Analyzing the External and Internal Environment questions