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Core Competence
Defined as “collective learning in the organization, especially how to coordinate diverse production skills and integrate multiple streams of technologies” (Prahalad and Hamel, 1990), the analysis of Frisk Alloy Wire Inc. and Percon illustrates that the company integrated core competence in the production of high performance alloy products.
The company employs a combination of technologies in the production process of drawing wire. Brian Frisk, the VP of Engineering and head of production demonstrates core competency through diverse production skills and technological expertise from the first step of molten metal to the last step that involves various shapes of drawn wire.
Furthermore, core competence is demonstrated by the ability to manufacture high performance alloy products from various copper alloys. The capacity to develop high performance alloy wires was a product of years of learning, acquisition, and application of technical expertise.
According to Sieloff (2010), “it took a couple of years for Frisk Alloy to solve the engineering issues related to developing the high-performance wire production process.” The development of their iconic product, Percon 24 involved the development of cadmium free product that was not only high performance, but also environmentally friendly.
The analysis demonstrates accumulation and explicit application of knowledge because it took Frisk Alloy ten years to develop Percon 24 as a product that marched PD135 and achieve certification from NAVAIR.
Successful development of cadmium free Percon 24 was knowledge based, unique and inimitable, and extendable to other markets because it was environmentally friendly and good price-to-performance value. The sustainability of core competence of Frisk Alloy revolves around the capacity to produce high performance alloy products at good price-to-performance value.
Strategic Groups
According to Hamel and Prahalad (1989), “Strategic group analysis considers the characteristics of firms as the basis for distinction.” Strategic group on the other hand refers to group of firms within a specific industry that pursue their goals and objectives from a similar strategic perspective. From the case study material, two strategic groups that emerge are high quality alloy producers and mass producers of alloy products.
Frisk alloy and Brass Division of Orlin Corporation represent these two strategic groups respectively. Frisk Alloy is part of strategic groups of firms that focus on two strategic dimensions, to grow slowly and opportunistically, but does not aspire to become a leader in the market. The achievement of these strategic objectives involves production of high quality alloy products.
The second strategic group of mass producers of alloy products produces similar products in mass quantity, but emphasizes on strength of its products. Their central objective is to operate from the bottom-line. The underlying factor is that strategic groups analyze the specific demands with a market and develop specific designs to meet the needs of certain segments (Jiang 2009, p. 155).
The similarity between the two strategic groups is that they try to build isolating mechanisms that aim at discouraging new entrants into the market. Furthermore, they preserve the imperfectly competitive market condition by employing high levels of entry barriers such as increase in investment costs and better performance.
References
Hamel, G. and Prahalad, C.K. (1989). Strategic Intent. Harvard Business Review. Vol 67, no. 3, pp. 63-75.
Jiang, X. (2009). Strategic Managemnet for Fucntional Areas in an Organization. International Journal of Business and Management. Vol.4, no. 2, pp. 140-156.
Prahalad, C.K. and Hamel, G. (1990). The Core Competence of the Corporation. Harvard Business Review. Vol. 68, no, 4, pp. 79-87.
Sieloff, S.F. (2010). Fisk Alloy Wire, Inc. and Percon. Case Research Journal. Vol. 30, no, 2. Pp. 83-99.
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