Focusing on Core Competencies and Divestment

Marc Wilczek ()
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Marc Wilczek: T-Systems International GmbH

Chapter Chapter 14 in The Road to a Modern IT Factory, 2014, pp 111-115 from Springer

Abstract: Abstract For a company to make its mark competitively, it needs a strategic advantage, that is, the ability to do something better or more cheaply than others. Resource theory states that such advantages are, above all else, a product of internal capabilities (resource-based view of the firm, cf. e.g. Pfeffer and Salancik 1978; Porter 1980; Wernerfelt 1984; Barney 1991; Rumelt 1991; Peteraf 1993). Applying this theory, Porter (1985) has described companies in terms of their value chain, distinguishing between primary functions and support functions. The former contribute directly to value creation (for instance: production), while the latter only have an indirect contribution at best, but can make the existence of the primary functions possible in the first place (for instance: procurement, HR, or finance).

Keywords: Core Competency; Strategic Advantage; Indirect Contribution; Internal Capability; Hurdle Rate (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1007/978-3-642-40219-7_14

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