Outsourcing and the industrial clusters; The core competencies Perspective

Under economic globalization, the success of a countrys economy depends largely on the degree to which it participates in global production networks. This prompts countries to accelerate industrial restructuring and upgrading. It should be also noted that organizations can no longer achieve competitive advantage in the process of production or delivery of goods because of the fast changes occurring in the areas of technology and production of goods. Organizations, therefore, should only rely on their core competencies and assign their non-core competencies to other organizations. Co-operation between organizations in order to increase competitive advantage and concentration on organizations' core competencies can lead to the formation of industrial clusters, which considerably appeals to industrial and economic analyzers nowadays. This study, which is the outcome of the researcher's field work in Khorasan Iran Khodro Company, reiterates the fact that if organizations rely solely on their core competencies in the process of production and delivery of goods, they can finally produce goods which have the competencies of several organizations (industrial clusters) and can compete with each other globally. This study explicates a model upon which organizations can base the formation of a specialized industrial cluster in which all the members have their own core competencies in the process of production.