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How can a firm avoid that its core competence(s) are threatened when it is collaborating with other firms such as in demand chain collaboration or outsourcing? (...) Read more? Sign up for free

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Outsourcing Parts of a CC

In general, mixing outsourcing and core competence strategies is not a good idea. Knowledge is at the heart of most CCs and by outsourcing parts of a CC you risk to lose the leading edge know-how that is necessary to sustain your CC.
Furthermore you risk transfering crucial know-how to the outsourcing provider who may emerge later as a strong competitor.


An Example

I totally agree with Pete. IBM PCs are one of the greatest examples. When IBM outsourced its processors to intel, IBM lost its CC and therefore competitive advantage. The above resulted in consumers wanting to buy any PCs which are "intel inside" instead of IBM PCS.

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