Intersection Marketing

Business Strengths + Insights from Market Intelligence = Customer-Compelling Values.

<h2><a href="http://johniduh.yolasite.com/breakthrough-marketing/eating-and-drinking-on-the-go-trends-led-beverage-manufacturers-introducing-plastic-and-cans-beverages-such-as-plastic-coke-lacasera-teems-eat-can-malt-can-juice-eat-" title="Eating-and-Drinking-on-the-go trends led beverage manufacturers introducing Plastic and Cans Beverages, such as plastic: Coke, Lacasera, Teems, eat, Can-malt, can-Juice eat.">Eating-and-Drinking-on-the-go trends led beverage manufacturers introducing Plastic and Can Beverages, such as plastic: Coke, Lacasera, Teems, Can-malt, Can-Juice eat</a>, etc</h2>

Eating-and-Drinking-on-the-go trends led beverage manufacturers introducing Plastic and Can Beverages, such as plastic: Coke, Lacasera, Teems, Can-malt, Can-Juice eat, etc

Posted 185 weeks ago
<h2><a href="http://johniduh.yolasite.com/breakthrough-marketing/trends-in-healthy-living-through-immune-boosting-led-alliance-in-motion-global-developed-c24-7" title="Trends in healthy living through immune boosting led Alliance in Motion Global developed:  C24/7">Trends in healthy living through immune boosting led Alliance in Motion Global developed: C24/7</a>.</h2>
<p><small><span>C24/7 Natura-Ceuticals contains the most number of anti-oxidants with approximately 22,000 phytonutrients in one product. The ingredients of C24/7 work in “synergy” to produce the maximum result for your body, making it the most potent anti-aging product in the history of supplementation.</span></small></p>
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<p><span>C24/7 is the new breakthrough in food supplements; a unique and patented formulation that delivers the highest amount of anti-oxidants and phyto-nutrients.<br/><br/>C24/7 is packed with benefits for different needs, from controlling blood sugar and cholesterol, to healthy blood circulation and sexual vitality.</span><span></span></p>

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Trends in healthy living through immune boosting led Alliance in Motion Global developed: C24/7.

C24/7 Natura-Ceuticals contains the most number of anti-oxidants with approximately 22,000 phytonutrients in one product. The ingredients of C24/7 work in “synergy” to produce the maximum result for your body, making it the most potent anti-aging product in the history of supplementation.

C24/7 is the new breakthrough in food supplements; a unique and patented formulation that delivers the highest amount of anti-oxidants and phyto-nutrients.

C24/7 is packed with benefits for different needs, from controlling blood sugar and cholesterol, to healthy blood circulation and sexual vitality.

Posted 185 weeks ago
<h2><a href="http://johniduh.yolasite.com/breakthrough-marketing/dual-trend-in-the-in-hot-drinks-and-the-use-of-herbs-led-kasapreko-a-ghanaian-based-alcoholic-manufacturer-introduces-alomo-bitters-" title="Dual-trend in the in Hot-Drinks and the use of herbs led KASAPREKO, a Ghanaian based alcoholic manufacturer introduces Alomo Bitters.">Dual-trend in the in Hot-Drinks and the use of herbs led KASAPREKO, a Ghanaian based alcoholic manufacturer introduces Alomo Bitters.</a></h2>
<p><small><strong>Alomo Bitters</strong><span class="apple-converted-space"> </span><span>is a herbal alcoholic product made</span><span> </span><span>from carefully chosen tropical plant extracts and</span><span> </span><span>very well known for its proven medicinal values.</span><span> </span><span>It has its roots in the traditional herbal industry</span><span> </span><span>that is meticulously researched by the Centre for</span><span> </span><span>Scientific Research into Plant Medicine a World</span><span> </span><span>Health Organization affiliate, based at Mampong</span><span> </span><span>Akuapem in the Eastern region of Ghana.</span></small></p>
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<p><span class="yui-tag-span yui-tag"><span class="yui-tag-span yui-tag"><strong><br/>Alomo Bitters</strong><span class="apple-converted-space"> </span><span>– A herbal based drink, is not just any ordinary alcoholic drink. With its origins from Ghana, Alomo Bitters is made from carefully selected tropical plant extracts which forms part of a secret recipe. It’s popular for its aphrodisiac qualities.</span></span><span><br/></span></span></p>
<p><span class="yui-tag-span yui-tag">To quote a recent article by Euromonitor -<span class="apple-converted-space"> </span><em>“Africa brings one of the most surprising alcohol growth stories in recent times. Distilled in Ghana, sales of Alomo Bitters in neighboring Nigeria have skyrocketed over the last few years. What’s behind the jump? The drink is said to hold aphrodisiac qualities for men and women. Nigerians mix the beverage with non-alcoholic beer – sales of that have soared in the country too. Plans to export the drink to more countries on the continent are said to be afoot. -</em><span class="apple-converted-space"></span><strong><em>Euromonitor’s</em></strong><span class="apple-converted-space"></span><em>Malandrankis says the supposed sexual enhancing properties “hit all the right buttons in Nigeria.” Watch out for it on local shelves soon.”</em><span></span></span></p>

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<p><span class="yui-tag-span yui-tag">Packaged in a<span class="apple-converted-space"> </span><strong>200ml PET, 30ml Sachet</strong><span class="apple-converted-space"> </span>and<span class="apple-converted-space"> </span><strong>750ml Glass</strong><span class="apple-converted-space"> </span>bottle Alomo Bitters is developed in conjunction with the Center for Scientific Research into Plant Medicine in Ghana, an affiliate of the World Health Organization,<span class="apple-converted-space"> </span><strong>Alomo Bitters contains natural components/ingredients which promote/stimulate/enhances vitality and general well being.</strong><span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">Alomo Bitters is also c<strong>leanses bowel and relieves body pain, helps ease menstrual pains/cramps in women and contains anti malaria properties</strong><span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">Alomo Bitters is enjoyed all over the world, it’s vitalizing and best enjoyed straight or mixed with your favorite juice or soda.<span></span></span></p>

<p></p>
<p><span class="yui-tag-span yui-tag">In 2012 Alomo Bitters was awarded a Super Brand. It has also been identified to be amongst the top 5 emerging brands in the world by CNN money.<span></span></span></p>

<p></p>

<p><a href="http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html"><strong><span class="yui-tag-span yui-tag"><a href="http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html">http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html</a></span></strong></a></p>
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<p><span></span></p>

Dual-trend in the in Hot-Drinks and the use of herbs led KASAPREKO, a Ghanaian based alcoholic manufacturer introduces Alomo Bitters.

Alomo Bitters is a herbal alcoholic product made from carefully chosen tropical plant extracts and very well known for its proven medicinal values. It has its roots in the traditional herbal industry that is meticulously researched by the Centre for Scientific Research into Plant Medicine a World Health Organization affiliate, based at Mampong Akuapem in the Eastern region of Ghana.


Alomo Bitters
 – A herbal based drink, is not just any ordinary alcoholic drink. With its origins from Ghana, Alomo Bitters is made from carefully selected tropical plant extracts which forms part of a secret recipe. It’s popular for its aphrodisiac qualities.

To quote a recent article by Euromonitor - “Africa brings one of the most surprising alcohol growth stories in recent times. Distilled in Ghana, sales of Alomo Bitters in neighboring Nigeria have skyrocketed over the last few years. What’s behind the jump? The drink is said to hold aphrodisiac qualities for men and women. Nigerians mix the beverage with non-alcoholic beer – sales of that have soared in the country too. Plans to export the drink to more countries on the continent are said to be afoot. -Euromonitor’sMalandrankis says the supposed sexual enhancing properties “hit all the right buttons in Nigeria.” Watch out for it on local shelves soon.”

Packaged in a 200ml PET, 30ml Sachet and 750ml Glass bottle Alomo Bitters is developed in conjunction with the Center for Scientific Research into Plant Medicine in Ghana, an affiliate of the World Health Organization, Alomo Bitters contains natural components/ingredients which promote/stimulate/enhances vitality and general well being.

Alomo Bitters is also cleanses bowel and relieves body pain, helps ease menstrual pains/cramps in women and contains anti malaria properties

Alomo Bitters is enjoyed all over the world, it’s vitalizing and best enjoyed straight or mixed with your favorite juice or soda.

In 2012 Alomo Bitters was awarded a Super Brand. It has also been identified to be amongst the top 5 emerging brands in the world by CNN money.

http://money.cnn.com/gallery/news/companies/2013/10/08/exotic-drinks/6.html

Posted 185 weeks ago
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<h2><a href="http://johniduh.yolasite.com/gurus-on-marketing/chinalife-introduced-%E2%80%9Cultra-slim-tea%E2%80%9D-kinetizing-" title="Chinalife Introduced “Ultra Slim Tea” - Kinetizing!">Chinalife Introduced “Ultra Slim Tea” - Kinetizing!</a></h2>
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<p class="MsoNormal"><span></span><strong>Chinalife,</strong> born in 2007,  felt that the concept of natural healthy living with herbs and tea had, for far too long, been thrown together with images of perfectly pure people restricting themselves from indulgence. </p>
<p class="MsoNormal"><span>With such reason in mind, <strong>Chinalife</strong> introduced </span><strong>Ultra Slim Tea, </strong><span>a high grade herbal tea traditionally used to help reduce weight & regulate blood fat levels - an effective and natural way to lose weight. </span><strong>Ultra Slim Tea</strong><span> can be infused up to 3 times simply by adding fresh water. Ultra Slim Tea defines a  market space, Kinetizing!</span></p>

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Chinalife, born in 2007,  felt that the concept of natural healthy living with herbs and tea had, for far too long, been thrown together with images of perfectly pure people restricting themselves from indulgence. 

With such reason in mind, Chinalife introduced Ultra Slim Tea, a high grade herbal tea traditionally used to help reduce weight & regulate blood fat levels - an effective and natural way to lose weight. Ultra Slim Tea can be infused up to 3 times simply by adding fresh water. Ultra Slim Tea defines a  market space, Kinetizing!

 

Posted 185 weeks ago
<h2><a href="http://johniduh.yolasite.com/gurus-on-marketing/historical-flashback-create-a-business-space-in-the-newspaper-industry" title="Historical Flashback create a Business space in the Newspaper Industry">Historical Flashback creates a Business space in the Newspaper Industry</a></h2>
<p><span>The desire to document Nigeria’s historical past events has led to the emergence of a newspaper called <strong>Historical Flashback.</strong> The newspaper  serves as the reservoir of information about Nigeria’s past from the pre colonial period, publishing past historical stories in a refreshed manner for documentation purpose. Many things happened in the country  and they continue to happen because many people did not know what happened in the past. </span><strong>Historical Flashback</strong><span> is the first of its kind in the newspaper industry. </span><strong>Historical Flashback</strong><span> is in the market to fill the gap of documentation. The documentation of the past and materials about Nigeria’s past events that cannot be found anywhere. “If you pick the newspaper you can read about events of 100 years ago, stories of past events before and after the country’s independence. The publishers are researching on the past stories in the country so that they can be freshly presented for those who have anything to do with Nigeria. It’s not just newspaper, its historical, as well as documented information. </span></p>

Historical Flashback creates a Business space in the Newspaper Industry

The desire to document Nigeria’s historical past events has led to the emergence of a newspaper called Historical Flashback. The newspaper  serves as the reservoir of information about Nigeria’s past from the pre colonial period, publishing past historical stories in a refreshed manner for documentation purpose. Many things happened in the country  and they continue to happen because many people did not know what happened in the past. Historical Flashback is the first of its kind in the newspaper industry. Historical Flashback is in the market to fill the gap of documentation. The documentation of the past and materials about Nigeria’s past events that cannot be found anywhere. “If you pick the newspaper you can read about events of 100 years ago, stories of past events before and after the country’s independence. The publishers are researching on the past stories in the country so that they can be freshly presented for those who have anything to do with Nigeria. It’s not just newspaper, its historical, as well as documented information. 

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/gurus-on-marketing/kinetizing-marketing-has-the-ability-to-drive-successes-consider-the-introduction-of-energy-bars-whose-market-was-fragmented-by-definition-targeting-at-different-demograp" title="Kinetizing Marketing has the ability to drive successes. Consider the introduction of energy bars, whose market was fragmented by  definition targeting at different demographics.">Kinetizing Marketing has the ability to drive successes. Consider the introduction of energy bars, whose market was fragmented by definition targeting at different demographics.</a></h2>
<p><strong><span> </span></strong><strong><span>Energy bars</span></strong><span> are supplemental bars containing </span><span><a href="http://en.wikipedia.org/wiki/Cereal" title="Cereal"><span>cereals</span></a></span><span> and other high energy foods targeted at people that require quick energy but do not have time for a meal. They are different from </span><span><a href="http://en.wikipedia.org/wiki/Energy_drink" title="Energy drink"><span>energy drinks</span></a></span><span>, which contain </span><span><a href="http://en.wikipedia.org/wiki/Caffeine" title="Caffeine"><span>caffeine</span></a></span><span>, whereas bars provide </span><span><a href="http://en.wikipedia.org/wiki/Food_energy" title="Food energy"><span>food energy</span></a>. </span><span>Holland & Barrett stock a wide range of energy bars that combine </span><a href="http://www.hollandandbarrett.com/pages/categories.asp?cid=5"><span>sports nutrition</span></a><span> with great tasting confectionary. Customer favourite Powerbar, offer a wide choice of tasty energy bars that are a great source of </span><strong>protein</strong><span> and long lasting energy. Trek bars also come in a range of delicious forms, including protein packed flapjacks and virtually fat free brownies.</span>However, there are Energy bars for women, for children, for sports people; even protein bar, Nutrition bar, Honey bar etc.</p>

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Kinetizing Marketing has the ability to drive successes. Consider the introduction of energy bars, whose market was fragmented by definition targeting at different demographics.

 Energy bars are supplemental bars containing cereals and other high energy foods targeted at people that require quick energy but do not have time for a meal. They are different from energy drinks, which contain caffeine, whereas bars provide food energyHolland & Barrett stock a wide range of energy bars that combine sports nutrition with great tasting confectionary. Customer favourite Powerbar, offer a wide choice of tasty energy bars that are a great source of protein and long lasting energy. Trek bars also come in a range of delicious forms, including protein packed flapjacks and virtually fat free brownies.However, there are Energy bars for women, for children, for sports people; even protein bar, Nutrition bar, Honey bar etc.

 

Posted 186 weeks ago
<p class="MsoNormal"><strong><span>Revlon: An ultimate Kinetizing Marketer, smart at Category innovation. Consider  the innovation of  @Colorstay Lipstick!“</span></strong></p>

<p class="MsoNormal"><span>Revlon is a global color cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant / deodorants and beauty care products company whose vision is<span class="apple-converted-space"> </span></span><span class="corporatebold"><strong>Glamour, Excitement and Innovation through High-quality Products at Affordable Prices</strong></span>. <span>The company began its success with <strong>opaque long-lasting nail enamel</strong> sold to beauty salons. Revlon sold its nail enamel through department stores and selected drugstores. llicitudin.</span> <span>Revlon® is one of the strongest consumer brand franchises in the world. Revlon’s global brand portfolio includes Revlon® color cosmetics, Almay® color cosmetics, SinfulColors® color cosmetics, Pure Ice® color cosmetics, Revlon ColorSilk® hair color, Revlon® beauty tools, Charlie® fragrances, Mitchum® anti-perspirant / deodorants, and Ultima II® and Gatineau® skincare and its products are sold in over 100 countries across six continents. Websites featuring current product and promotional information can be reached at<span class="apple-converted-space"> </span></span><span><a href="http://www.revlon.com/" target="_blank"><span><a href="http://www.revlon.com">www.revlon.com</a></span></a></span><span>,</span><span></span></p>

Revlon: An ultimate Kinetizing Marketer, smart at Category innovation. Consider  the innovation of  @Colorstay Lipstick!“

Revlon is a global color cosmetics, hair color, beauty tools, fragrances, skincare, anti-perspirant / deodorants and beauty care products company whose vision is Glamour, Excitement and Innovation through High-quality Products at Affordable Prices. The company began its success with opaque long-lasting nail enamel sold to beauty salons. Revlon sold its nail enamel through department stores and selected drugstores. llicitudin. Revlon® is one of the strongest consumer brand franchises in the world. Revlon’s global brand portfolio includes Revlon® color cosmetics, Almay® color cosmetics, SinfulColors® color cosmetics, Pure Ice® color cosmetics, Revlon ColorSilk® hair color, Revlon® beauty tools, Charlie® fragrances, Mitchum® anti-perspirant / deodorants, and Ultima II® and Gatineau® skincare and its products are sold in over 100 countries across six continents. Websites featuring current product and promotional information can be reached at www.revlon.com,

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/gurus/starbucks%E2%80%98-howard-schultz-is-one-of-my-nominees-for-kinetizing-strategy" title="Starbucks‘ HOWARD SCHULTZ is one of my nominees for kinetizing strategy" target="_self">Starbucks‘ HOWARD SCHULTZ is one of my nominees for kinetizing </a>Initiatives</h2>
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<div><span class="userContent">When HOWARD SCHULTZ, starbucks ceo till year 2000,came to the company in 1982, he recognized an unfilled niche for “cafes serving gourmet coffee directly to customers“. This strategic initiative helps starbucks achieve loyal customer base in Seatle. In the next growth phase, it applied the same successful formular that had worked wo<span class="text_exposed_show">nders in seattle, first in other cities in the pacific Northwest, then through out North America, and finally, across the globe. Once starbucks had established itself as a presence in thousands of cities internationally, it sought to increase the number of purchases by existing customers with “kinetizing strategy“ that led to new in-store merchandise including compilation CDs, Starbucks Duetto Visa Cards that allows customer to recieve points towards starbucks‘ purchases when they use it; and high-speed internet wireless access at thousands of starbucks‘ HOTSPOTS through a deal with T-MOBILE. Finally, starbucks kinetized into grocery store aisles with Frappucino bottled drinks, starbucks‘ self-branded ice-cream, and the purchase of a tea retailer, Tazor Tea!</span></span></div>
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Starbucks‘ HOWARD SCHULTZ is one of my nominees for kinetizing Initiatives

When HOWARD SCHULTZ, starbucks ceo till year 2000,came to the company in 1982, he recognized an unfilled niche for “cafes serving gourmet coffee directly to customers“. This strategic initiative helps starbucks achieve loyal customer base in Seatle. In the next growth phase, it applied the same successful formular that had worked wonders in seattle, first in other cities in the pacific Northwest, then through out North America, and finally, across the globe. Once starbucks had established itself as a presence in thousands of cities internationally, it sought to increase the number of purchases by existing customers with “kinetizing strategy“ that led to new in-store merchandise including compilation CDs, Starbucks Duetto Visa Cards that allows customer to recieve points towards starbucks‘ purchases when they use it; and high-speed internet wireless access at thousands of starbucks‘ HOTSPOTS through a deal with T-MOBILE. Finally, starbucks kinetized into grocery store aisles with Frappucino bottled drinks, starbucks‘ self-branded ice-cream, and the purchase of a tea retailer, Tazor Tea!
Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/blog/ford-repositioned-existing-products-services-resulting-in-an-original-category-" title="Ford Used Kinetizing Model Repositioned Existing Products/Services Resulting in an Original Category." target="_self">Ford Repositioned Existing Products/Services Resulting in an Original Category.</a></h2>
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<p><span>In the United Kingdom, Ford positioned its Galaxy Minivan in relation to First-Class Air Travel comfortable enough to be suitable for busy executives. By highlighting attributes far different from those that would appeal to buyers looking for a family vehicle, the automaker used a classic Kinetizng approach created a Minivan subcategory.</span></p>
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Ford Repositioned Existing Products/Services Resulting in an Original Category.

In the United Kingdom, Ford positioned its Galaxy Minivan in relation to First-Class Air Travel comfortable enough to be suitable for busy executives. By highlighting attributes far different from those that would appeal to buyers looking for a family vehicle, the automaker used a classic Kinetizng approach created a Minivan subcategory.

Posted 186 weeks ago
<h2><a href="http://johniduh.yolasite.com/blog/royal-philips-used-market-insight-to-kinetize-attuned-to-consumer-tech-trend" title="ROYAL PHILIPS Leverage Market Insight Plus Consumer Electronics-Trend to Kinetize" target="_self">ROYAL PHILIPS Used Insights from Consumer Electronics-Trends, Kinetiz</a>ing</h2>
<p><span class="usercontent"><span>Philips researchers asked 1,650 consumers and 180 customers in dozens of in-depth and qualitative interviews and focus groups on what was most important to them in using technology. Respondents from the Uk, U.S, France, Germany, The Netherlands, Hong Kong, China and Brazil agreed on one theing: they wanted the benefits of tech</span></span><span class="textexposedshow"><span>nology without the hassles. With these, Philips crafted “Sense and Simplicity” campaign with the believe that their brands plus innovation will reflect simplicity – the major of mordern technology. To achieve its plans, Philips tirlessly integrate media: the campaign consists of prints, Online, Television advertisement showcasing perspectives on the journey to simplicity, resonating with consumers. It just make sense!</span></span></p>

ROYAL PHILIPS Used Insights from Consumer Electronics-Trends, Kinetizing

Philips researchers asked 1,650 consumers and 180 customers in dozens of in-depth and qualitative interviews and focus groups on what was most important to them in using technology. Respondents from the Uk, U.S, France, Germany, The Netherlands, Hong Kong, China and Brazil agreed on one theing: they wanted the benefits of technology without the hassles. With these, Philips crafted “Sense and Simplicity” campaign with the believe that their brands plus innovation will reflect simplicity – the major of mordern technology. To achieve its plans, Philips tirlessly integrate media: the campaign consists of prints, Online, Television advertisement showcasing perspectives on the journey to simplicity, resonating with consumers. It just make sense!

Posted 186 weeks ago

Core Competencies

Posted by John Iduh on Friday, April 12, 2013 Under: Business Principles That Work

In their 1990 article entitled, The Core Competence of the Corporation, C.K. Prahalad and Gary Hamel coined the term core competencies, or the collective learning and coordination skills behind the firm's product lines. They made the case that core competencies are the source of competitive advantage and enable the firm to introduce an array of new products and services.

According to Prahalad and Hamel, core competencies lead to the development of core products. Core products are not directly sold to end users; rather, they are used to build a larger number of end-user products. For example, motors are a core product that can be used in wide array of end products. The business units of the corporation each tap into the relatively few core products to develop a larger number of end user products based on the core product technology. This flow from core competencies to end products is shown in the following diagram:


Core Competencies to End Products

End Products
 1  2  3 
 4  5  6 
 7  8  9 
101112
Business
1
Business
2
Business
3
Business
4
   
        Core Product  1        
 
 
        Core Product  2        
 
 
Competence
1
Competence
2
Competence
3
Competence
4



The intersection of market opportunities with core competencies forms the basis for launching new businesses. By combining a set of core competencies in different ways and matching them to market opportunities, a corporation can launch a vast array of businesses.

Without core competencies, a large corporation is just a collection of discrete businesses. Core competencies serve as the glue that bonds the business units together into a coherent portfolio.


Developing Core Competencies

According to Prahalad and Hamel, core competencies arise from the integration of multiple technologies and the coordination of diverse production skills. Some examples include Philip's expertise in optical media and Sony's ability to miniaturize electronics.

There are three tests useful for identifying a core competence. A core competence should:

  1. provide access to a wide variety of markets, and
  2. contribute significantly to the end-product benefits, and
  3. be difficult for competitors to imitate.

Core competencies tend to be rooted in the ability to integrate and coordinate various groups in the organization. While a company may be able to hire a team of brilliant scientists in a particular technology, in doing so it does not automatically gain a core competence in that technology. It is the effective coordination among all the groups involved in bringing a product to market that results in a core competence.

It is not necessarily an expensive undertaking to develop core competencies. The missing pieces of a core competency often can be acquired at a low cost through alliances and licensing agreements. In many cases an organizational design that facilitates sharing of competencies can result in much more effective utilization of those competencies for little or no additional cost.

To better understand how to develop core competencies, it is worthwhile to understand what they do not entail. According to Prahalad and Hamel, core competencies are not necessarily about:

  • outspending rivals on R&D
  • sharing costs among business units
  • integrating vertically

While the building of core competencies may be facilitated by some of these actions, by themselves they are insufficient.


The Loss of Core Competencies

Cost-cutting moves sometimes destroy the ability to build core competencies. For example, decentralization makes it more difficult to build core competencies because autonomous groups rely on outsourcing of critical tasks, and this outsourcing prevents the firm from developing core competencies in those tasks since it no longer consolidates the know-how that is spread throughout the company.

Failure to recognize core competencies may lead to decisions that result in their loss. For example, in the 1970's many U.S. manufacturers divested themselves of their television manufacturing businesses, reasoning that the industry was mature and that high quality, low cost models were available from Far East manufacturers. In the process, they lost their core competence in video, and this loss resulted in a handicap in the newer digital television industry.

Similarly, Motorola divested itself of its semiconductor DRAM business at 256Kb level, and then was unable to enter the 1Mb market on its own. By recognizing its core competencies and understanding the time required to build them or regain them, a company can make better divestment decisions.


Core Products

Core competencies manifest themselves in core products that serve as a link between the competencies and end products. Core products enable value creation in the end products. Examples of firms and some of their core products include:

  • 3M - substrates, coatings, and adhesives

  • Black & Decker - small electric motors

  • Canon - laser printer subsystems

  • Matsushita - VCR subsystems, compressors

  • NEC - semiconductors

  • Honda - gasoline powered engines

The core products are used to launch a variety of end products. For example, Honda uses its engines in automobiles, motorcycles, lawn mowers, and portable generators.

Because firms may sell their core products to other firms that use them as the basis for end user products, traditional measures of brand market share are insufficient for evaluating the success of core competencies. Prahalad and Hamel suggest that core product share is the appropriate metric. While a company may have a low brand share, it may have high core product share and it is this share that is important from a core competency standpoint.

Once a firm has successful core products, it can expand the number of uses in order to gain a cost advantage via economies of scale and economies of scope.


Implications for Corporate Management

Prahalad and Hamel suggest that a corporation should be organized into a portfolio of core competencies rather than a portfolio of independent business units. Business unit managers tend to focus on getting immediate end-products to market rapidly and usually do not feel responsible for developing company-wide core competencies. Consequently, without the incentive and direction from corporate management to do otherwise, strategic business units are inclined to underinvest in the building of core competencies.

If a business unit does manage to develop its own core competencies over time, due to its autonomy it may not share them with other business units. As a solution to this problem, Prahalad and Hamel suggest that corporate managers should have the ability to allocate not only cash but also core competencies among business units. Business units that lose key employees for the sake of a corporate core competency should be recognized for their contribution.


Recommended Reading

Andrew Campbell and Kathleen Sommers Luchs, Core Competency-Based Strategy

In : Business Principles That Work 


Tags: core competencies 
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