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Click to edit Master title style,Click to edit Master text styles,Second Level,Third Level,Fourth Level,Fifth Level,*,Core Competence Strategy,Key summary reading:,Prahald,C.K.&,Hamel,G.(1990).The core competence of the corporation.,Harvard Business Review,68(3),79-91.,Key Premises,Build worldwide leadership in a,class,of product functionality(e.g,microprocessor controls)that can apply to multiple products,Build a maximum of five or six of these“core competencies”,Protect core competencies when making key strategic decisions:,resource allocation,alliances,outsourcing,Core competencies are,collective learning in the organization,1.,How to coordinate diverse production skills and multiple streams of technology,e.g.,Cascio,:harmonizing know-how in miniaturization,microprocessor design,material science,and,ultrathin,precision casing to produce an array of products such as miniature card calculators,pocket TVs and digital watches,2.,How to organize work and deliver value,e.g.3Ms competencies in substrates,coatings,and adhesives has allowed them to bring forth such diverse products as Post-It notes,magnetic tape,diskettes,photographic film,and adhesives,3.,How to develop and sustain communication,involvement,and deep commitment to working across organizational boundaries,involves many levels of people and all functions,such as in World-class research,Core competencies.,develop with time and experience,are tacit and hard to imitate or transfer,involve people-embodied skills,Identifying core competencies,1.,CCs,provide potential access to a wide variety of markets,e.g.,Cascios,display systems:calculators,TV sets,computers,LCDs,auto dashboards,2.,CCs,make a significant contribution to perceived customer benefits of end product,e.g.,Hondas engine expertise had benefits in autos,motorcycles,lawn mowers and generators,3.,CCs,are difficult for competitors to imitate because they involve comprehensive patterns of internal coordination and learning,e.g.,Philips competence in optical media that fed into a wide variety of other products,Outsourcing can be a shortcut to a short-term competitive product,but doesnt allow development of tacit knowledge and skills that underlie long-term sustainable product leadership,Which competencies are,core,?,How long could we preserve our competitiveness in this business if we did not control this particular competence?,How central is this competence to perceived customer benefits?,What future opportunities would be foreclosed if we were to lose this particular competence?,Top management role,Develop and communicate the,corporatewide,strategic architecture,that guides the competence acquisition process,communication,internal:employees understand goals and priorities,external:customers understand broad direction but not proprietary details,resource allocation priorities,reward systems,organization design:avoid the tyranny of the autonomous product division,
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