Strategy based on the Core Competencies of the Organisation
"Strategic management is trying to understand where you will sit in tomorrow's world, not where
you hope to sit; assessing where you can be and deciding where you want to be."
- John F Welch. General Electric Co
Management guru Michael Porter argues that business strategy is not about operational effectiveness (doing things better), but about doing things differently. For Porter, 'Competitive Strategy' means deliberately choosing a different set of activities to deliver a unique mix of value.
Core competencies of a company can be defined as a set of skills and expertise that enable a company to deliver exceptional value to customers. A shift in emphasis and focus from products to the core competencies from which those products are born can enable a company to develop in unexpected but profitable directions. For example, Sony's core competencies in miniaturisation led to the development of the revolutionary Sony Walkman; Honda's core competencies in engines shifted their focus from just cars to marine engines, generators and lawn mowers. In this way Canon defined itself as a specialist in optics, not cameras, which opened the way for its branching into photocopiers and scanners.
By shifting the focus from the outputs of the company to the skills and know-how that enables the organisation to deliver its programmes successfully, the way is opened to seeing new business opportunities.
Note: This web page is not intended to provide comprehensive coverage of the subject, merely a brief introduction to provoke thought and to lead to a more in depth understanding and application of the topic, either through further reading - or from me as your management consultant, executive trainer or personal coach in a consultancy project, training course, workshop or seminar.