Research On The Core Competence Of China's Enterprises In The Face Of Globalization

Core competence has been given much attention since Prahalad and Hamel released their famous thesis, The Core Competence of the Corporation, on Harvard Business Review in 1990. Many researchers have concentrated their studies on the area for a long time and a great number of papers and books on it have been published from then on. But most of them were focusing on the core competence of large-sized businesses and try to guide them to pursue acquisition and to develop across national or industrial boundaries. However the core competence of small and middle businesses has been ignored. For small and middle businesses are very crucial to China's economy, researching on their core competence gains a respectively important position in the area of strategy management research of China. Especially facing with the tide of globalization, small and middle businesses need a theory to guide them how they could locate and improve their own core competence to survive and to develop.Based on the theory of Comparative Advantage, Competence and Value-added Chain, this research makes a great progress on the definition and characteristics of core competence. Those characteristics are listed below:All kinds of enterprises in buyer's market have their own core competences in spite of their sizes; Core competence is not solitary but belonging to a system of competences; There are great differences between core competences of different companies or of different developing stages of one company; Core competence can be a direct result of developing company's core technology, but there are many other causations other than core technology; The core competence of a company keeps on changing all along; The transfer of core competence has a fixed rule that it always starts at the middle part of a value-added chain and paves its way to two ends of the chain.Besides, the research puts up a strategic frame to locate and improve the core competences of China's enterprises according to their special competing surroundings. Then supportive points the government should hold are presented. And at the last part, much attention is given to clusters of small businesses in Zhejiang, China. From their innovation characteristics and performances to their core competences, the research gets some conclusions in a new area. For example, competence of seeking strategic information, competence of collective R&D, competence of producing originated from assembling skilled workers and professional managers in the clusters and competence of marketing based on special markets near the clusters are basic types of core competence of Zhejiang's clusters of small businesses. What's more, a supporting frame of technology is outlined in order to improve the overall technology level of clusters of small businesses.The development of small and middle businesses is crucial to China's wholeeconomy. They must know how to locate and improve their core competences to make sure they can survive in blazing competition and in the tide of globalization. Wish this research work a contribution to the development of China's small and middle businesses and to that of its' whole economy.