Strategic Intent
As mentioned in the introduction, Hamel and Prahalad consider a company's core competency to be embedded within the organisation. Defining core competency is not an easy task, but it can be said to be a bundle of organisational and technological capabilities that collectively capture know-how and are capable of being deployed to provide unique functionality and sustain advantage in the market place. This know-how may evidently include tacit knowledge, which perhaps is most evident in traditionally clan-structured organisations. Prahalad and Hamel argue that models such as "strategic fit", "generic strategies", and strategic hierarchy" may indeed have had a negative effect on the performance of Western companies. The cause of this negative impact is that non-western companies, primarily represented by the Japanese, have underpinned the logic of Western management thought.
Hamel and Prahalad base their argument upon the dramatic post-war ascent of Japanese companies, and that the latter rose to dominate world markets by having initial ambitions that in the West would have been considered highly unrealistic with regards to their resources and capabilities. Still, an obsession to win was created and sustained at all levels of the organisation, thus laying the groundwork for a 10- to 20-year quest for global leadership. The authors term this "strategic intent", but the latter does more than to simply envision a desired leadership position and establish the criterion the company will use to chart its progress. Strategic intent also includes an active management process to focus the entire organisation on the essence of winning, but it is also stable over time while allowing for reinterpretation as new opportunities emerge. Similarly, it helps set a target that deserves personal commitment and effort. Although strategic intent is stable over time, a target should be motivational and goals thus need to be realistic. In this sense, the professors compares strategic intent to a marathon run in 400-meter sprints: "No one knows what the terrain will look like at mile 26, so the role of top management is to focus the organisation's attention on the ground to be covered in the next 400 meters". Consequently, a challenge needs to create a sense of urgency, and competitor focus should be developed at every level through widespread use of competitive intelligence. Additionally, employees need to be provided the skills necessary to work efficiently, and the organisation as a whole should be given time to digest one challenge before launching another.
Hamel and Prahalad mention four approaches to competitive innovation that have been used by Japanese companies in their quest for global expansion. These are building layers of advantage, searching for loose bricks, changing the terms of engagement, and competing through collaboration. These approaches will be discussed in greater detail throughout the paper, and further elaboration will be given on the thesis presented by the authors. In terms of the strategic models that will be applied, it should be mentioned that Hamel and Prahalad appear to be more critical of the way the models are actually applied than the general theory behind them. They do in fact describe the product life cycle, the experience curve, product portfolios, and generic strategies to be "reasonable concepts". However, they add the models also tend to limit the number of strategic options considered by managers: "They create a preference for selling businesses rather than defending them. They yield predictable strategies that rivals easily decode". As will be shown, this argument holds some validity for several of the major strategy models.