Key Components of Hamel and Prahalad's Approach to Strategy, Apple Situation - Case Study Example

The paper 'Key Components of Hamel and Prahalad's Approach to Strategy, Apple Situation" is a good example of a management case study. Hamel and Prahalad created an approach to strategy in the form of the core competence model. According to this model, an organization is able to roll out more easily into new markets when it makes good use of its core competences. These competences are in the form of some unique knowledge that is within the possession of the organization and not found in their counterparts. This model, unlike Porter’s view which employs the “outside-in-view”, uses the “inside-out-view”.

This paper will examine the key components of Hamel and Prahalad's approach to strategy and will use Apple as a case study to explain the concepts underpinning the core competence model as exemplified by the company’s journey and exploits.

Key components of the core competence model

Using its core competence, an organization is able to make strategic moves and develop fresh products that surprise its market in a captivating way. Core competencies also lend the company to flexibility since by knowing its core competences, the organization is able to use this as the pivot point around which all major decisions must revolve.

The model concentrates on a mix of specialized integrated, collaborative methods and applied skills, knowledge and attitude. Hamel and Prahalad emphasize that the focus should be on creating a new competitive space rather than warding off the current competition—to look to the future rather than over the shoulder into the past. These core competencies are four in total namely: resources – assets and tools available to the organization; capabilities – the potential of the organization to build on its competences; competitive advantage; and finally, strategy. More core competences can be acquired by the organization using the core competencies matrix designed by Hamel and Prahalad by combining current competences with emergent or existing markets.

Founded by Steve Wozniak and Steve Jobs, Apple was in November of 2014 the world’s most valuable company measured by market capitalization. The story of how Apple got there is simple—the creation of a new competitive space in the form of Apple I (an easy-to-use computer). The ease of use has remained a dominant logic (core competence) in Apple’s escapades ever since. Shortly after the Apple, I came the Apple II, a relatively simple computer that users could use right out of the box with a GUI (graphical user interface) which was unheard of up to that time as well as a mouse. It was the Apple II that set Apple apart, making the company a leader in the market and setting off a revolution in computing.

Jobs and Wozniak’s bravery and willingness to take a chance to pursue what they knew they could offer (capabilities) using what they knew and had (resources) allowed them to create a new competitive space for themselves within which they thrived as evidenced above.

Conclusion

Using the core competence model, an organization is able to navigate unchartered territory as opposed to fighting out what’s already chartered by others and thereby giving themselves a competitive advantage by setting them apart from the rest.