2. Nurture the enterprise core competencies
The enterprise core competencies are nurtured by the enterprise itself. When we take a comprehensive view of two long-lasting top 500 international enterprises, we discover that the core ability of these business enterprises comes from the same and particular link of the business enterprise value chain, namely a strategic link. This link can be production one, sales one or research one. It can have certain supportive added-value one as well. To keep the strategic advantage of the enterprise, the key is a strategic link that controls the business enterprise value chain. NIKE is one of the biggest international enterprises that manages sports wear. But NIKE doesn’t make shoes: what they do is design and sale. They leave production to the developing countries. Korea and China are its biggest producing bases. Its headquarters have no more than 70 people, mainly engaging in the product design and marketing, set up its own core ability, make it grow prosperously. .
The market economy is the competition economy, an enterprise that doesn’t have competition ability can hardly exist and develop in the market. The result of the competition may be more market share, may also be profit decrease or loss capital due to the high competition cost. Therefore, the high life span company follows the super competition principle to develop generally. Competition principle is all the competitors race on the same track.
It’s Intel that researched the memory of a computer. In 1965, a Japanese semi-conductor enterprise made Intel lose business for 6 months after entering the American market with the cheap or price, the company of Intel took super competition principle as the guide line finally, gave up the memory, and the brain parts chip of the information technique, made the company create the brilliancy continuously, and even held the lead in the frontier of information techniques. At present, the production of Intel takes 80% of world chip market share. The numerical color television of the United States vanquishing the emulation color television of Japan, the quartz clock of Japan vanquishing machine clocks of Switzerland are all results that pursue the super competition principle. Most Chinese enterprises follow the traditional competition principle. They have to imitate and follow the foreign rivals; thus it is difficult for them to form their own core capacity because of their lack of advanced techniques. In these two years the profitable the once glorious Chinese enterprise, ChangHong Group, fell to their market suffered a defeat. The initial reason was what they follow is competition principle, such as price wars.
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