CA Inter P6 · Chapter 12 · Question 1 of 10
According to Prahalad and Hamel, a capability qualifies as a core competence if it passes three tests. These are that it:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) Gives access to a wide variety of markets, contributes significantly to the benefits customers perceive in the end product, and is difficult for competitors to imitate
Explanation
Prahalad and Hamel's three tests are market extendibility (access to many markets), customer value (a real contribution to perceived customer benefit) and inimitability (hard to copy). A capability shared by all firms or easily copied is a threshold capability, not a core competence.
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