Core Competence Final 04-05-2013

7/30/2019 Core Competence Final 04-05-2013

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THE

CORE COMPETENCE

OF

THE CORPORATION

Kumar Sourabh

Kumar Vikas

M Rajiv

Naresh Verma

Nishant PagariaPankaj Kumar

Pankaj Srivastava

Parimal Sinha

Pradeep jain

Pramod Shrivastava

Business Policy & StrategyPresented By : Group-3

Roll No : 019 to 028


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GTE (USA)

NEC (JAPAN)

Early1980s

* Be active in telecommunications* Span a variety of business * Smaller* No experience in

telecommunications1988 * Become a telephone operating

company * Leader in semiconductors* Succeed in many business

Saleschange* 1980 : $99.80 billion* 1988 : $164.6 billion

* 1980 : $38 billion* 1988 : $218 billion

GTE VS NEC


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WHY NEC OUTPACED GTE

Articulate a strategic intent to exploit convergenceofcomputing and communication (C &C)

Constituted C&C coordination committee

Acquire competencies through alliancesDevelop core products (semiconductors)

Blending of competencies

Leader in consumer electronics


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Spawn

unanticipated

products (NEC)

Core competence

End

productCore

competence

Competitiveness

of todays

products (GET)

In the long run ,which

can provide more

profit for corporation?Short-term

Long-term

CORE COMPETENCE CONCEPT OF CORPORATION

Core competenciesare

the collective

learning in the organization, especially

to coordinate diverse production skilland integrate multiple streams of

technologic.

by Prahalad & Hamel


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CORE COMPETENCIES!

Even good marketing wont make a me toofirm competitive in the long run.

Competencies are enhanced with time.

Make or buy decisions are simplified.Non-competencies can be supplemented

with strategic alliances and licensing

agreements.


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Root

Trunk

Branch

Business

1

1

2

3

End products

Core

competences

4321

Core product2

Core product1

Business

4

1

2

3

2

3

41

Business

2

1

2

3

Business

3

1

2

3

Basic

technologies

Business unit

ROOTS OF COMPETITIVENESS

Fruits & Leaves


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2

3

1

Strategic

StepsStrategic

ArchitectureStrategic

Intent

Identify core

Competences ,

Basic technologies

and core products

clarify the

corporations

goals

Improving theemployees

Program strategies

according tostrategic

architecture to

create core

competencies

Exploit the convergence

of computing and

communication

Competencies sever for computing,

communications and components

business

Semiconductors

Industry Foresight

need

HOW TO GET COMPETITIVE ADVANTAGES?


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A map of future

HOW TO BUILD CORE COMPETENCIES?

Restructure

Corporation

structure

Strategic

Architecture

Get basic

technologies

Develop

Core product

Enter new

business

Get licensing deal

alliances/acquisitions/recruitment

Invent oneself

OEM-supply

Leader in corecompetence

Build global brandumbrellas

advantages from core

competencies \ brands\

chains \ Capital

\reputation

R&D department

Location department

Leaning organization


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1

Provide potential

access to a wide

variety of market

2

Make a

significantcontribution to

the perceived

customer

benefits of the

end product

3

Should be

difficult for

competitors to

imitate.

IDENTIFYING CORE COMPETENCIES


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Barrier to build core competencies

Imprisoned resources

Different Targets

SUCCEED IN BUSINESS COMPETITION

Competitiveness advantagesGTE

Everything forcore competencies

Resource arrangement

base on Strategic invent

Base on many advantages

Invent risk


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Every end productoffered by Canon

has at least one coreproduct that makesa significant

contribution to theperceived customerbenefits.

REAL WORLD EXAMPLE:


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SO WHAT?

If you dont know what your core competencies are,

you may spin off a business unit that contains yourmost competitive skills, employees, or core products.

Long term strategy involves constant innovation.Core competencies provide a market position thatallows a company to influence what products will beavailable in the future.

StrategicArchitecture

A companys future is determined by its core

competencies. These competencies define the architecture

and characteristics of the global competitive firm.


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RESOURCE ALLOCATION

When core competencies are the roots of thefirm, specialized employees and coreproducts can be allocated to various SBUs.

At Canon, specialized employees movebetween camera and printer productsregularly.


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INNOVATION

Using core competencies, new technologiescan be developed without heavy R&D costs.

Casio: Small-screen LCD TV

Canon: Personal copierKomatsu: Underwater remote-controlled bulldozer

Honda: Off-road buggy

Sony: 8mm camcorder


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COMPETENCE BUILDING

The focus of todays global firm should be in

competence building.

Constantly improving competencies providesfor new integrated technologies.

Competencies provide focus for long-termgoals.


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COMPETITIVE ADVANTAGE

Short-term marketshare can be won byanyone with a goodidea.

Race to get productson the shelf.

Long-term successinvolves competencystructuredorganizations,innovation, andmarket consistency.

Same core products,integrated into newend products,creating new markets.


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RISKS OF IGNORING CORE COMPETENCIES

Opportunities for growth will be needlessly turned down.

As a company division lies and fractures into ever smallerbusiness units, competencies may become fragmented andweakened.

The lack of core competence perspective can desensitize a

company to its growing dependence on outside suppliers of coreproducts.

A company focused only on end products may fail to investadequately in new core competencies that can propel growth inthe future.

A company that fails to understand the core competence basisfor competition in its industry may be surprised by new entrantswho rely on competencies developed in other end markets.

Companies insensitive to the issue of core competence may

unwittingly relinquish valuable skills when they divest an under-performing business. 17


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SUMMARY

Learn your competencies

Develop your competencies

Structure your organization around your

competencies Involve core products in all end products

Outsource non-competencies with strategic

alliances and licensing.


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Thank You


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WHAT IS CORE COMPETENCIES?

Core competencies are the skills,characteristics, and assets that set yourcompany apart from competitors. They are the

fuel for innovation and the roots of competitiveadvantage.

For example,

A Sony benefit ispocketability

core competence is miniaturizationAt Federal Express benefit is on time delivery

core competence is logistics management

At Motorola benefit is undeterred communication

core competence is wireless communication.


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COMPETENCIES TO CORE PRODUCTS

Core products are the tangible evidence ofour core competencies. They are keycontributors to the customer benefits

received from the end product. Honda: Small gas engines

Canon: Desktop laser printer engines

3M: Adhesives and substrates

Documents

Core Competence Final 04-05-2013