Research on leading Japanese firms engaged in optoelectronics has revealed
a number of factors affecting competence-building. A complex, long-term pro
cess, competence-building centers around the key), technology areas that en
hance a firm's core capabilities. Although serendipity plays an important r
ole in the initial stage, the evidence from this investigation suggests tha
t competence-building can be planned strategically-one step at a time, over
a decade or more-to enable organizational transformation. A long-term, ard
uous-process involving organizational learning, once competence has been bu
ilt, it permits firms to branch successfully into new arena, provided that
organizational routines to sustain competencies have also been implemented.