A core competency is a capability that provides a firm with a competitive advantage. These competencies develop over time and represent the culmination of a firm’s greatest skills. In order to be considered a core competency, three conditions should be met. First, the competency should open up an array of markets. Next, it should help differentiate the firm’s most important products. Finally, a core competency should be difficult to for competitors to imitate (De Kluyver & Pearce, 2012).
With 85% of value of an automobile coming from manufacturing that happens before reaching GM’s final assembly plants, it is obvious that one of GM’s core competencies is supply chain management. GM manages a supply chain of over 18,000 suppliers around the world. In order to improve its supply chain management, GM has developed a program called Strategic Supplier Engagement (SSE). Through the SSE program, GM works to improve relationships with suppliers and focus on those that perform to the highest standards. GM believes that transparency around their supplier expectations has not only improved communication, but set the bar higher for competing suppliers (General Motors, 2015). Clearly, by operating a global supply chain with thousands of suppliers, GM has shown that supply chain management is one of their core competencies.
De Kluyver, C. & Pearce, J. (2012). Strategy: A View From the Top (4th ed.). Boston: Prentice Hall.
General Motors. (2015). A Driving Force: 2014 Sustainability Report. Retrieved September 11, 2015, from http://www.gmsustainability.com/_pdfs/gm2014sr.pdf.