Podcast
Questions and Answers
What core competency did NEC successfully build in the 1970s and 1980s?
What core competency did NEC successfully build in the 1970s and 1980s?
What is the key difference in how NEC and GTE approached their businesses?
What is the key difference in how NEC and GTE approached their businesses?
The authors argue that outsourcing is a viable long-term strategy for building core competencies.
The authors argue that outsourcing is a viable long-term strategy for building core competencies.
False (B)
What is the authors' main point about the relationship between 'end products' and 'core competencies'?
What is the authors' main point about the relationship between 'end products' and 'core competencies'?
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According to the authors, how does 'strategic architecture' support the development of core competencies?
According to the authors, how does 'strategic architecture' support the development of core competencies?
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What is the primary danger of the 'SBU' organizational structure?
What is the primary danger of the 'SBU' organizational structure?
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According to the authors, what is the most important role of senior management regarding 'core competencies'?
According to the authors, what is the most important role of senior management regarding 'core competencies'?
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How do the authors suggest that companies should approach the allocation of 'core competencies'?
How do the authors suggest that companies should approach the allocation of 'core competencies'?
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The authors argue that developing core competencies is a more complex and challenging task than integrating vertically within a company.
The authors argue that developing core competencies is a more complex and challenging task than integrating vertically within a company.
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What is the authors' primary argument about the danger of companies relying solely on 'end product' metrics?
What is the authors' primary argument about the danger of companies relying solely on 'end product' metrics?
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According to the authors, what is one of the key benefits of developing a 'strategic architecture' for a company?
According to the authors, what is one of the key benefits of developing a 'strategic architecture' for a company?
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What is the main point made by the authors about the 'Tyranny of the SBU'?
What is the main point made by the authors about the 'Tyranny of the SBU'?
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The authors argue that developing core competencies is a complex process that requires a long-term commitment from senior management.
The authors argue that developing core competencies is a complex process that requires a long-term commitment from senior management.
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Study Notes
Core Competence of the Corporation
- Global competition is judged not on restructuring but on identifying, cultivating, and exploiting core competencies.
- The article critiques Western companies' inability to adapt to changing market dynamics, contrasting them with the success of NEC in the 1980s and 1990s in diverse fields like telecommunications, semiconductors, and computers.
- GTE, once positioned for future tech dominance, lost ground due to not focusing on core competencies in a defined strategic architecture, unlike NEC.
- Successful companies like NEC define a clear strategic intent ("C&C") for convergence of computing and communication, acquiring competencies along those lines, and building collaborative relationships in core products.
- Core competencies are not static; they represent an organization's collective learning (how to coordinate diverse production skills and integrate multiple technologies). Examples include Sony's miniaturization or Philips' optical media expertise.
- Core competencies go beyond simply sharing costs or facilities; they entail a coordinated, shared understanding driven by upper management across departments.
- Identifying core competencies involves several criteria: 1) wide market access, 2) customer benefit contribution, and 3) competitive difficulty in imitation.
- Core products are tangible embodiments of core competencies, forming the basis for product diversification, and providing opportunities for revenue and market feedback.
- A diversified corporation is likened to a tree, with core products/ competencies as roots, businesses/units as branches, and end-products as fruits.
- Management must build a strategic architecture to define competencies, their technologies/elements, future market/product paths, and required resources; it also must manage inter-business units effectively, rather than only independently managing divisions.
- Western companies often lack clear vision for managing core competencies and allocating resources across all businesses; they often look at products rather than holistic core competencies.
- Restructuring, or short-term gains, are not appropriate responses; rather consider core competencies over longer periods.
- Maintaining and expanding competencies is vital for long-term competitiveness.
Rethinking the Corporation
- The structure of the diversified corporation is challenged as insufficient for today's dynamic markets; existing practices are too focused on product-market, not competence-building, strategies.
- The article emphasizes the need to manage the corporation as a collection of core competencies, not businesses.
- Japanese companies like Canon are cited as successfully identifying and utilizing core competencies, in contrast to Western competitors like Xerox.
- Core competency building requires a long-term view, and a commitment across the entire company.
- Companies need to consider not only short-term measures but long-term strategic architecture.
- The implications of not understanding or developing core competencies are considerable; failure is likely.
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Description
This quiz explores the concept of core competencies in corporations, focusing on how companies like NEC successfully navigated global competition by cultivating specific skills. It contrasts successful strategies with failures, highlighting the importance of aligning core competencies with strategic intent. Analyze how organizations can adapt and thrive in dynamic markets through collective learning and technological integration.
