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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.