The Research On Core Competence Of FAW Car Co., Ltd.

FAW Car Co., Ltd.(FCC), as one of the stock-subsidiaries of FAW GroupCorporation, is a core enterprise with its focus on self-owned brand car development.In the past few decades, FCC has already achieved its particular strengths with itssound corporate image and powerful intangible assets. However, with the developmentof economic globalization and the ever-growing competition in the automobileindustry, FCC now is gradually showing some deficiencies in its competitive power.Against such a background, how to handle the intense competition from joint andforeign ventures and how to develop sustainable competitive advantages become a bigchallenge and crucial topic that FCC now is facing.Since Hamel and Prahalad first introduced the concept of “Core Competence” inThe Core Competence of the Corporation published in Harvard Business Review in1990, it has rapidly become the dominant theory applied in enterprise developmentand strategic study. With its theoretical significance in enterprise operation andmanagement, it has set off a wave of theory study. This thesis defines corecompetence as a combination of an enterprise’s key resources and competences withknowledge and innovation at its core. It is a dynamic and balanced system that canenable the enterprise to obtain sustainable competitive advantages, and also thesource for an enterprise to gain its sustainable competitive power. Based on thistheoretical framework of core competence, this thesis paper adopts FCC as its studysubject to conduct a study on its core competence evaluation and cultivation in orderto enable FCC to gain an edge in the intense competition in future market and realizeits sustainable development.This paper consists of4chapters. Chapter1, with the help of PEST analysisapproach, makes a comprehensive analysis in4aspects such as politics, economy,society and technology in order to recognize the impact of macro-environment onFCC. This part also resorts to Porter Competence Model to analyze the five forces in car factory. Meanwhile, it analyzes FCC’s major competitors to identify the marketcompetition pattern and its profit potential. Finally, this part makes a holistic analysison FCC’S internal competence so as to have a clear view on its internal resources,thus providing basic data for its core competence evaluation. Chapter2starts with abrief introduction of core competence theory and its evaluation method. With thistheoretical framework, this part designs a particular evaluating index system formanufacturing enterprises. Based on this and together with fuzzy synthetic evaluationmethod, this paper establishes an evaluating model to conduct a scientific andobjective evaluation on FCC’s core competence in an effort to have a betterunderstanding of FCC’s core competence.Chapter3adopts AHP approach to analyzeFCC’S techniques and capacities concerning its core competence. Based on theevaluation results, it makes a comparison between the results and the industrysituation as well as FCC’s enterprise strategies to identify the core competence thatFCC needs thus establishing its core competence strategem.3specific problems willbe solved such as what core competence FCC will need in the future, what techniquesand abilities FCC’s core competence should include, and how FCC can obtain aninnovative development. Chapter4explores how to cultivate FCC’s core competenceconsidering its actual conditions. From the internal and external aspects, it attempts toobtain sustainable development by means of establishing core competence concept,building learning organization and corporate strategic alliance, parenting advantage,etc.