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The Core Competence of theCorporation
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NEC versus GTE
In 1980, NEC is about 1/3 of GTE
In 1988, NEC became 1.3 times of GTE
Worl leaer in semiconuctors !irst"tier #la$er in telecommunications
Core com#etence%
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Core Com#etence &o'ic of NEC
(uil C ) C *com#utin' an communications+ Committee
Te -a$ to evelo# core com#etence
cuisition *trate'ic alliances+
ccumulation
arin'
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NECs 2$ria trate'ic lliances
Core #rouct semiconuctor
NEC entere over 100 alliances to aim at builin'
com#etencies ra#il$ an at lo- cost
NEC a #ortfolio of com#etencies
GTE a #ortfolio of businesses
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Te 4oots of Com#etitive vanta'e
1 5 3 6 7 8 9 10 11 15
En :rouct 1 En #rouct 5 En :rouct 3 En :rouct 6
Core :rouct 5
Core :rouct 1
Core
Com#etence 1
Core
Com#etence 5
Core
Com#etence 3
Core
Com#etence 6
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Te 4oots of Com#etitive vanta'e
;efinition
Core com#etence
Core #rouct
En #rouct E
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Wat is Core Com#etence>
Core com#etencies are te collective learnin' in te
or'ani?ation, es#eciall$ o- to coorinate iverse
#rouction s@ills an inte'rate multi#le streams of
tecnolo'ies.
Com#anies coul not ave ima'ine all te en #roucts
out of its core com#etence in te earl$ sta'es%
;oes not mean outs#enin' rivals on researc anevelo#ment>
;oes not mean sare costs%
;iffer from (A%
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Wat is Core Com#etence >
Tree tests to ientif$ core com#etence
:rovie #otential access to a -ie variet$ of mar@ets
2a@e a si'nificant contribution to te #erceive customer benefits
of te en #rouct
(e ifficult for com#etitors to imitate
Te -a$s to buil core com#etence
Internal investment
trate'ic alliances
;istin'uis bet-een ivestin' te business an estro$in'
com#etencies
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!rom Core Com#etencies to Core :roucts
Core #roucts
&in@ bet-een ientifie core com#etencies an en #roucts
Te com#onents an subassemblies tat actuall$ contribute to te
value of te en #roucts
E
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!rom Core Com#etencies to Core :roucts
Im#ortance of core #rouct
;ominant #osition in core #roucts allo-s
a com#an$ to sa#e te evolution of a##lications an en mar@ets
consistentl$ reuce te cost, time, an ris@ in ne- #rouct evelo#ment
economies of scale an sco#e
(4N; leaersi# vs. :4ICE leaersi#
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!rom Core Com#etencies to Core :roucts
;ifferent 'oal at eac level
at te level of core com#etence
Te GOAL is to buil -orl leaersi# in te esi'n an evelo#ment.
at te level of core #roucts Te GOALis to ma
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Te T$rann$ of te (A
Com#are t-o conce#ts of te cor#oration
(A or Core Com#etence
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Te T$rann$ of te (A
ome troubles -it (A
Anerinvestment in evelo#in' core com#etencies an core
#roucts
Im#risone resources
(oune innovation
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;evelo#in' trate'ic rcitecture
Wat is strate'ic arcitecture
roa ma# of te future tat ientifies -ic core com#etencies to
buil an teir constituent tecnolo'ies
2a@e resource allocation #riorities trans#arent to te or'ani?ation
Establis obectives for com#etence builin'
E
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;evelo#in' trate'ic rcitecture
;ifferent com#anies, ifferent strate'ic arcitectures
Tree #oints
Tree
Te cor#oration or'ani?e aroun core #roucts
Core com#etencies
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4ee#lo$in' to E
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Conclusion
Core com#etencies are te -ells#rin' of ne- business
evelo#ment.
Win manufacturin' leaersi# in core #roucts an ca#ture'lobal sare trou' bran"builin' #ro'rams.