Week 3: Core Competencies Model

Question 1

Core Competencies Model approach

Answer 1

Fully embraces “inside-out” perspective on competitive advantages in the firm.
Core competencies are “knowledge-based resources” that contribute to the benefits of the end product customers perceive. Difficult to imitate, gives access to market

Question 2

Explain the model

Answer 2

1. Core competence - distinct but limited number of learnings in which company and its competitors excel.
   –>
2. Forms basis with various branches of core products.
   *core product 1
   *core product 2
3. Various businesses embody the core products which embody core competence.
   *Business 1
   *Business 2
   *Business 3
   *Business 4

Question 3

Conglomerate cooperation driven firm

Answer 3

*Essence of competition is distilled down to the individual competitiveness of every product within the portfolio.
*Corporate structure consists of a portfolio of businesses, delineated into product-market combinations (PMCs)
*Each business unit operates autonomously
*Capital is allocated business-to business
*Optimise return from internal capital market

Question 4

Core competency driven firm

Answer 4

*essence of competition lies in fostering stronger core competencies through inter-firm competition
*portfolio of core competencies is cultivated given rise of knowledge architecture
*SBU as reservoir of an contributor to core competencies
*capital and talent allocated per competence
*maximize competence-based advantages

Relative performance (not absolute) matters!!! Stay with what they do better than competitors (not what they do well)!

Core competencies erode fast!!!Never stop searching for new core competencies and adjust!

Value appropriation- valuable, rare, difficult to imitate.