Core Competencies. Steven Forbes Marriott School November 2005. Agenda. Competencies defined Brainstorming competencies The competitive diversified corporation Exercise: identifying competencies Strategic architecture. What are core competencies?.
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The old concept of the diversified corporation is a portfolio of strategic business units (SBU’s) within a similar product or customer category. Each SBU’s goal is to put competitive products on the shelf today.
Today’s corporation must maintain competitiveness by developing core competencies. These competencies determine the strategic architecture of the firm. Competencies must translate into core products, which significantly contribute to the firm’s end products.
What costs are involved in developing new products if your market requires constant innovation?
The only company that might get away with a lack of innovation is one that manufactures electric chairs for government contracts.
What if you could miniaturize anything? What then would it cost to develop new products? What products would you make?
Every end product offered by Canon has at least one core product that makes a significant contribution to the perceived customer benefits.
- (HBR 1990)
A company’s future is determined by it’s core competencies. These competencies define the architecture and characteristics of the global competitive firm.
Short-term market share can be won by anyone with a good idea.
Race to get products on the shelf.
Long-term success involves competency structured organizations, innovation, and market consistency.
Same core products, integrated into new end products, creating new markets.