Conversion And Tractility Of The Core Competence Function

The enterprise strategy is a dynamic process of development, with the development of enterprise, strategy also changes, and different strategy forms appear in different stages. However, with the whole development of strategy, the core competence function hides inside, and provides support for the development of strategy. After the well-known strategic management expert Ansoff posing the diversification management, a lot of enterprises adopted the management. The essence of diversification management is depending on their advantages, the enterprises meet the consumers'needs and make benefit through the variety expansion of vertical management or business area development of horizontal management. But the diversification management causes the resource to be dispersible, the partial investment insufficiency. While it also increases the risk of new enterprise entering the new area, enlarge enterprise's management span, causes the enterprise unstable. After 1980s, a lot of companies which adopted the diversification management met serious management crisis. Some enterprises were compelled to dismiss or reduce staff largely. Under this background, Prahalad and Hamel proposed the core competence; many enterprises of European and American adopted this concept and separated the non-core business. These enterprises re-established their technical skill and concentrated developing core business, which made the enterprises to survive in the dynamic competition. The enterprise could get long-term growth and development. Guided by core competence, the enterprises began to adapt professionalization management and stressed their core competence. However, professionalization management is not perfect management, which focuses on a particular area and is unable to adapt the dynamic market environment. Therefore, the choice of strategy faces the contradiction between professionalization management and diversification management. With the development of core competence in practice area, core competence function extends and changes. Gradually core competence function develops from the enterprise level and market level to the network level.This dissertation reviews some definitions such as function, core competence by the research method of literature review. According to the literature reviews it defines the conception of core competence function; from enterprise level, market level and network level, it studies the core competence function in enterprise level and market level by comparative method. From network level, it proves that network level's core competence function could balance the contradiction between professionalization management and diversification management by Best Response Dynamics of Game Theory. Through the comparative of core competence function of three levels, it sums up law and development trend of core competence function. On this basis, it sums up inspiration about conversion and tractility of core competence function for enterprise development.The main conclusions of this dissertation include:First, the core competence function is a dynamic concept, and it is related to dynamic industry, management pattern and enterprise resource in certain period. Along with each other's changing, the development of core competence function is objectively inevitable.Second, the law of core competence function could be summarized: based on the development of the enterprise level——based on the competitive market level——based on a balanced win-win network level. In this process, extent and content of core competence function is not limited to a single enterprise or several competitive enterprises, but in the development of the entire network.Third, in the network level, core competence function could solve the contradiction between professionalization management and diversification management. Each node uses professionalization management, and according to the market demands the entire network use diversification management, so that it could solve the predicament of strategic choice.The main innovation points of this dissertation are as below: First, it is proved that core competence function of network could balance professionalization management and diversification management.Second, it sums up the law and development trend of core competence function in order to better guide the management and development of enterprise.