Research On The Core Competence Of The Corporation Based On Vertex-weighted Graph

Along with the process of economic globalization, regional economic integration, and the rapid development of information technology, the business environment is undergoing a profound change. Consequent on, destabilizing and uncertain factors which affect the development of corporations increase strikingly. A large number of corporations which can not accommodate the changes declined or withdrew from the competition arena. The Chinese corporations have experienced the baptism of more than 30 years' reform and opening up. Their overall strength has been continuously enhanced, and a lot of well-known corporations have gradually developed and grown up. However, the gaps of scale and effectiveness still exist when compared with the international large corporations. After accessing to WTO, our business circles urgently need for the theoretical and methodological guidance to obtain and maintain sustainable competitive advantages in the highly competitive market. In the aspect of the source of corporations' competitive advantages, Prahalad and Hamel put forward the core competence theory which aroused attentions from theorists and practitioners. The core competence theory suggests that the sustainable competitive advantages lie in possessing core competencies. Among them, the key issues of the theoretical study reside in how to conduct quantitative analysis of corporation capabilities, how to identify and give a correct evaluation of core competencies. Numerous studies about this field emerged, but so far, theoretical research on the core competence has not been systematic, the concept of core competence has not been unified and there lacks a scientific and perfect identification system. These problems which exist in theory and practice urgently require further research on the core competence theory.Based on the systematical research findings, this paper synthetically uses theories of management, statistics, graph theory, core and coritivity theory to conduct research. This paper adopts the research methods of literature, theoretical arguments, data statistical analysis, model optimum to conduct the theoretical analysis and empirical research on the identification and evaluation of the core competence. This paper conducts a useful exploration about how companies enhance their core competence, and proposes targeted policy recommendations.The main research problems of this paper are as follows.First, define the related notions of the core competence theory. Resource, capability and core competence are the basic conceptions of core competence theory. These terms usually coincide in the conception and experience sense in certain research fields of strategic management, some scholars often do not distinguish them. For the research of the core competence, it is valuable to distinguish these concepts which will contribute to understand the connotation of core competence, and is significant to identify core competence and management issues.Second, research the composition and measurement of corporation capacity system. The core competence theory regards corporation as the aggregation of capabilities, and views the capability as the basic units of corporation. It is impossible to grasp its meaning as a whole if analyzing the corporation capabilities separately. While, it is impossible to distinguish these capabilities if considering corporation as a whole. It requires us to decompose systematically corporation capabilities and determine the corporation competitive advantage by these capabilities themselves and their interrelationships. The sundry classification of corporation competence and composition of the capabilities are artificially divided from different angles. One important issue of this paper is that how to design effective capabilities system. The capability measurement is founded on the study of capability components. Based on dividing the capability components, it needs to devise different measurement index system aiming at the different characteristics of each component.Third, construct the network model of the capabilities system. Each system which contains a binary relation can be simulated by a graph. The graph vertices represent the system components, the edges indicate relationships of system components, and the network is a diagram composed by the relations between the vertices. The corporation is a capabilities system. It is one of the key points to describe such a system using network diagram. The capabilities system is composed by capability components and their relations. The capabilities influence and restrict each other. The changes of capabilities or their relationships affect the capabilities system's features. Therefore, the study of capabilities system diagram should not only pay attention to the importance of corporation capabilities, but also concern the relations between them.Fourth, research the concepts and algorithms related to core and coritivity theory of vertex-weighted graph. The core and coritivity of a system is an effective tool to analyze system. It is also the main method used this paper to identify and evaluate the core competence. However, this theory is aimed at non-weighted graph, while the corporation capability graph constructed in this paper is vertex-weighted graph. For this reason, it needs to research the related concepts and algorithms of the core and coritivity of vertex-weighted graph, and improve the core and coritivity theory.Fifth, research the management of core competence. The core competence management includes a range of issues such as identification, evaluation, training and upgrading. The identification of core competence is a key link for promoting the theory's application. The former studies can be divided into qualitative description methods and quantitative methods. The qualitative methods can describe problems comprehensively, but lack of operability in practice. The quantitative methods own certain objectivity, while usually pay more attention to the outcome and ignore the process. With the help of core and coritivity theory, this paper researches core competence identification and strives to achieve the combination of qualitative methods and quantitative methods. On the basis of core competences identification, by the analysis of components composition and structure, and resorted to the vertex-weighted graph technology, this paper researches the cultivation and enhancement of core competence.The research innovations of this paper can be generalized as follows.First, based on the ideology of system theory and core competence theory, synthetically using relevant methods of statistics and graph theory, this paper constructs the vertex-weighted network of capabilities system.Corporation capabilities and activities are closely linked. The value chain model which is an effective tool to analyze business activities can be used to divide corporation's basic capability units, which are represented by the vertices of vertex-weighted graph. The way of vertex-weighted reflects the different importance of corporation's capabilities. Using statistical methods to analyze the closely links between capabilities, this paper constructs the edges of vertex-weighted graph. By intuitively expressing the structure of the corporation capability system, the vertex-weighted graph lays the foundation of quantitative identification and evaluation of core competence.Second, this paper utilizes the optimization technology of vertex-weighted graph to research the core competence of the corporation.The former research on core competence isolated the links between capability components and did not analyze them from a system point of view. This paper describes corporation capabilities system using the network model, identifies and evaluates core competence adopting the core and coritivity theory of vertex-weighted graph. It is not only consistent with the ideology of system theory, but clearly dissecting the structure and components of core competence. This paper opens up a new perspective for theoretical study of core competence.When researching the core competence of the corporation, many scholars tend to separate the identification and evaluation, usually ignore their relations. Identification focuses on what the core competence is, while evaluation emphasizes on measuring the intensity of core capability. In view of the characteristics of vertex-weighted core, this paper puts forward the evaluation coefficient of core competence intensity. By this evaluation coefficient, the core competence can be evaluated, and the combination of core competence identification and evaluation can be achieved. Cultivation and promotion of core competence is another important issue of core competence theory. From the perspective of network optimization, this paper advances several ways of nurturing and enhancing the core competence such as network diagram reconstruction, sub-graph decomposition or expansion.Third, enrich and expand the theory of core and coritivity of system.The theory of system core and coritivity by Xu Jin is aimed at the non-weighted connected graph. For the research of more meaningful vertex-weighted graph, it needs to improve the core and coritivity theory. Based on the core and coritivity theory, this paper puts forward the core and coritivity concepts of vertex-weighted graph, and discusses the coritivity's numeric area of the vertex-weighted graph. In order to promote the application of the theory, this paper analyzes the relevant algorithms and its complexity of coritivity. Besides, this paper studies the transformation from the edge-weighted graph to vertex-weighted graph, the core's construction of multi-dimensional graph, and expands the scope of core and coritivity theory of vertex-weighted graph.The main conclusions of this paper are as follows.First, the capability differs from the resource. The capability is the activity of creating value using tangible or intangible resources. The resource is the basis of the capability. For seeking capability, there must be the corresponding resource as guarantee. The capability is inseparable from the activity and is incarnated by the activity corporations engaged in.Second, the capabilities system is composed by the capability components and the relationships between them. It can be described by vertex-weighted graph. In the vertex-weighted graph, the graph vertices represent all the basic capabilities of corporation, the weight of vertex shows the importance of the capability, and the edges of network graph indicate the relations between capability components.Third, the core competence is the subsystem of capabilities system. In the vertex-weighted graph of capabilities, it can be expressed by subgraph with certain characteristics of vertex-weighted graph. The core and core competence of vertex-weighted graph has the same essence and similar features, so the study of core competence can be translated into the optimization of vertex-weighted graph, it also can be translated into the analysis and evaluation of vertex-weighted graph's core and coritivity.Fourth, the cultivation and enhancement of the core competence should pay attention to not only the components themselves, but rebuild the capabilities system for optimizing the allocation of resources. Based on the optimization ideology of network graph, the core competence can be cultivated and upgraded via network graph reconstruction, sub-graph decomposition or expansion.The theoretical exploration and empirical research results of this paper will guide corporations to locate and cognize their core competences exactly in practice, and provide useful guidance and reference for identifying and training their core competences. It is more conducive to help the core competence theory to transform from theory to practice, from the abstract to the concrete, from the lack of operability to easily operability.