core competence analysis
Marketing Diary-by Da Zhang
Sessions11-Models of Competitive Analysis
My Key Concept- Core competence
Core competencies are the collective learning of the organization and the guiding parameters for new markets and diversification. A company with core competencies, will be able to create more value. The process of developing core competencies starts with the strategic intent of being a leader in the market by leveraging the resources which requires three investments, technology, governance process, and collective learning. This concept points out to identifying various opportunity gaps. The next stage towards developing the core competencies is to leverage the current resources of the organization, which is known as developing the strategic architecture. Strategic architecture is a roadmap which predicts what core competencies to build and which related technologies are needed.
Having core competencies has the following advantages. First, it helps build a long term competitive advantage by helping in bridging the gap between performance and opportunity, and thus helping a company in being a potential leader in the industry. Second, it is an indicator that resources are being used in the right places in the right amount. Third, it helps in the development of core products. Fourth, Core competencies are meaningful if they are related to an attribute valued by the market. Customers need to perceive a consistent difference in important attributes between the producer’s products or services and those of its competitors. Last but not least, core competencies make a company focus on extensive R&D.
According to the Prahalad and Hamel (1990), three tests can used to determine if a core competence exists: a core competence should provide the firm with access to multiple markets; should lead to a perceived benefit by the customer; should be difficult for competitors to imitate.
Application-3M
3M has developed
Sessions11-Models of Competitive Analysis
My Key Concept- Core competence
Core competencies are the collective learning of the organization and the guiding parameters for new markets and diversification. A company with core competencies, will be able to create more value. The process of developing core competencies starts with the strategic intent of being a leader in the market by leveraging the resources which requires three investments, technology, governance process, and collective learning. This concept points out to identifying various opportunity gaps. The next stage towards developing the core competencies is to leverage the current resources of the organization, which is known as developing the strategic architecture. Strategic architecture is a roadmap which predicts what core competencies to build and which related technologies are needed.
Having core competencies has the following advantages. First, it helps build a long term competitive advantage by helping in bridging the gap between performance and opportunity, and thus helping a company in being a potential leader in the industry. Second, it is an indicator that resources are being used in the right places in the right amount. Third, it helps in the development of core products. Fourth, Core competencies are meaningful if they are related to an attribute valued by the market. Customers need to perceive a consistent difference in important attributes between the producer’s products or services and those of its competitors. Last but not least, core competencies make a company focus on extensive R&D.
According to the Prahalad and Hamel (1990), three tests can used to determine if a core competence exists: a core competence should provide the firm with access to multiple markets; should lead to a perceived benefit by the customer; should be difficult for competitors to imitate.
Application-3M
3M has developed
References: http://www.entrepreneurial-insights.com/core-competencies-overview/ http://www.openaccesslibrary.org/images/HAR142_Matthew_G._Kenney.pdf http://www.homeworkmarket.com/sites/default/files/q1/20/02/3m_leadership_competency.pdf