1. Session13: Core Competencies and Generic Strategies Dr. Mark H. Mortensen 66.490.211 and 212 Tues &Thurs 2:00 to 3:15 3:30 to 4:45 Manning School of Business

2. Mortensen Consulting Group Today 1. Attendance 2. Review the quiz answers 3. Discussion on Core Competencies of a company 4. Discussion on Generic Strategies of a company Welcome back from Spring Recess

3. Mortensen Consulting Group Core competencies "The Core Competence of the Corporation," C.K.Prahalad and Gary Hamel (1990) argue that "Core Competences" are some of the most important sources of uniqueness: These are the things that a company can do uniquely well, and that no-one else can copy quickly enough to affect competition.The Core Competence of the Corporation Prahalad and Hamel used examples of slow-growing and now-forgotten mega corporations that failed to recognize and capitalize on their strengths. They compared them with star performers of the 1980s (such as NEC, Canon and Honda), which had a very clear idea of what they were good at, and which grew very fast. Because these companies were focused on their core competences, and continually worked to build and reinforce them, their products were more advanced than those of their competitors, and customers were prepared to pay more for them. And as they switched effort away from areas where they were weak, and further focused on areas of strength, their products built up more and more of a market lead.

4. Mortensen Consulting Group Three tests for true core competences (Hamel and Prahalad) 1. Relevance: Firstly, the competence must give your customer something that strongly influences him or her to choose your product or service. If it does not, then it has no effect on your competitive position and is not a core competence. 2. Difficulty of imitation: Secondly, the core competence should be difficult to imitate. This allows you to provide products that are better than those of your competition. And because you're continually working to improve these skills, means that you can sustain its competitive position. 3. Breadth of application: Thirdly, it should be something that opens up a good number of potential markets. If it only opens up a few small, niche markets, then success in these markets will not be enough to sustain significant growth.

5. Mortensen Consulting Group Generic Strategies

6. Mortensen Consulting Group For Tuesday If you have not done so yet, read Chapter 5 in book “Selecting Business-Level Strategies” Starbucks Assignment

7. Mortensen Consulting Group Starbucks Assignment Read the assigned Starbucks Case Study and put yourself in 2008. What happened in the years up to the stockholders meeting that put Starbucks in a difficult position? What had they done wrong, in hindsight? Why do you think Starbucks pushed for growth so much during that decade? Given what happened from 2008 to 2013, did they do the right thing? E-mail me the paper, please, by start of class on Tuesday. If you want to do this with a classmate, please do, but let me know – and both e-mail me the same paper with both your names on it.

8. Mortensen Consulting Group Strategic Management – Spring 2013