Presented to : Presented by Group-4

Abhilash Kumar Singh 20Emp2-01

Prof. Arun Kumar Tripathy Anshul Gupta 20Emp2-05
Assistant Professor, Strategic Management Priyanka Aggarwal 20Emp2-16
Sajal Saxena 20Emp2-20
MDI Gurgaon Rajkumar SSP 20Emp2-24
Shiva Prasad Kafle 20Emp2-26
Core Competence
Core competencies lead to development of core products that contribute to competitiveness of wide range of
end products

Long Term Competitiveness Glue binding businesses together

Long Term Competitiveness Glue binding businesses together
Ability to build speedily at lower costs Brings coherence to disparate business units

CORE
COMPETENCE
Across layers of people & function to deliver value Dependence on external sources for core products
Harmonizing Technology & work Overcoming SBU mindset
Harmonizing Technology & work Overcoming SBU mindset

“Core Competencies are collective learnings in the organization, specially how to

coordinate diverse production skills and integrate multiple streams of technologies.”
Roots of Core
competence

Diversified corporation is like a large tree:

Trunk is core products, smaller branches are
business units and leaves, flowers, fruits are end
products

Core competence is like the root of the tree that

provides nourishment, sustenance and stability COMPETENCE
Identifying Core Competencies

Access to variety
3 basic tests can be applied to determine of markets
whether a possessed competency is core
competency or not so as to gain competitive
advantage.
CORE
COMPETENCE
Contribution to Difficult
perceived to
customer value Imitate
Rethinking the corporation
From core competence to core products to end products

Inventing new markets Emerging markets Shifting customer needs

Expansion Capturing opportunities In established markets

Comparison of GTE and NCE
Impact of acquiring core competencies

In 1980, well positioned to become leader In 1980, much smaller player: comparable
in IT industry, active in variety of businesses technological base in computer business
like defense, PABX, satellite etc. and no experience of telecommunications

PERCEPTION: Portfolio of businesses PERCEPTION: Portfolio of competencies

1980 sales revenue: $ 9.98 Bn 1980 sales revenue: $ 3.8 Bn

1988 sales revenue: $ 16.46 Bn 1988 sales revenue: $ 21.89 Bn

Eroded global position : closed down Emerged as world leader in semi-conductors

semi-conductors division and divested and key player in telecommunications and
others computer products
The NEC Growth Story
Strategic approach to building core competencies

Strategic Intent Strategic Evolving Markets Opportunities

Architecture

In early 1970’s top Computer & 3 interrelated streams of Computers, Components and
management anticipated Communication committee technology and market communications business would
convergence of computer and of top managers formed to evolution were identified : overlap and it will be difficult to
communication oversee development of Mainframes to distributed distinguish among them.
core competencies & core processing, IC to VLSI and
products mechanical cross-bar to Top-management decided semi-
ISDN conductors to be most important
core product
Strategic Partnerships Goal

Company entered into over 100 strategic All collaborative arrangements oriented
alliances with other firms aimed at towards technology access
building competencies rapidly at low Goal was to internalize partner-skills
cost.