Presentation

1. Presentation Core Competence & Value Innovation By Group 8 : 紫金之巅 石 光 雷 丹

2. Team Members • 窦伟 信息管理与信息系统 • 石光 信息管理与信息系统 • 张鹤 信息管理与信息系统 • 何治龙 信息管理与信息系统 • 屠蔚蓝 工业工程 • 郑坦 工业工程 • 李悦 工业工程 • 陈晓玲 电子商务 • 雷丹 文科班

3. Brief Introduction • The Core Competence of the Corporation • Written by: C.K.Prahalad and Gary Hamel • Value Innovation: The Strategic Logic of High Growth • Written by: W.Chan Kim and Renee Mauborgne

4. GTE & NEC Why is the dramatic change between GTE & NEC? The Logic What is Core Competence? How to identify Core Competence? What is Core/End Products? What’s the difference of SBU & Core Competence? How to develop strategic architecture?

5. GTE & NEC GTE: 1980: telecommunication industry Variety of products 1988: Telephone operating company Others closed or divested NEC: 1980: small computer business company 1988: World leader in telecommunication and computer

6. Why is the dramatic change between GTE & NEC? C&C Committee Strategic architecture Computing Resources Core Competence Communication Myriad strategic alliances Components Semiconductors Core Product PC Mainframe End Product Mobile

7. Why is the dramatic change between GTE & NEC? • GTE: • NO strategic intent and strategic architecture • NO commonly accepted view of evolving IT • SBU: Decentralization makes it impossible to focus on core competencies

8. Why is the dramatic change between GTE & NEC? Distinction between GTE & NEC: NEC: a portfolio of competencies GTE: a portfolio of businesses NEC: long-sighted (price/performance of current products) GTE: short-sighted (core competencies) The real source of CA: management’s ability to consolidate corporate-wide technologies and production skills into competencies

9. What is Core Competence? End Production Honda Cars Core Production Manufacturing Of engines Core Competence

10. What is Core Competence? • Collective learning in the organization • Technology integration • Embed tech into product via teamwork & value delivery • Communication, involvement & commitment to working across boundaries

11. How to identify Core Competence? CC provides potential access to a wide variety of markets 3 criteria CC should make a significant contribution to the end products (customer benefits ) CC should be difficult for competitors to imitate

12. What is Core/End Products? • Core Products: • The components that actually contributes to the value of end products • Linkage between Core Competence and end products • End Products: directly to customers • How to distinguish? • Core Products: manufacturing share • End Products: brand share

13. SBU & Core Competence • Reconceptualization of the Corporation • Costs of SBU • Underinvestment in developing Core Competence • Imprisoned Resources • Bounded Innovation

14. How to develop strategic architecture? Make resource allocation transparent To the entire organization The strategic architecture can not be copied easily by competitors. Development of administrative infrastructure to strategic architecture, teamwork, think long term Identify and commit to the technical and production linkages Across SBUs

15. Value Innovation

16. Outline • more information about Value Innovation • summary of the paper Value Innovation : The Strategic logic of High Growth

17. What’s Value Innovation • Value Innovation isnotdefining the solution to a problem. • V.I is redefiningthe problem itself.

18. Authors W. Chan Kim & Renée Mauborgne • W. Chan Kim is a professor of strategy . • He was a professor at the University of Michigan • He is an advisory member for the European Union. • He was born in Korea. • Renée Mauborgne is the INSEAD distinguished fellow and affiliate professor of strategy and management at INSEAD, France. • She was born in the United States.

19. The Book

20. Details of the Book Don’tCompete with Rivals—Make Them Irrelevant • In today’s overcrowded industries, competing head-on results in nothing but a bloody “red ocean” . • Tomorrow’s leading companies will succeed by creating “blue oceans” of uncontested market space ripe for growth .

21. Details of the Book(cont’d)

22. The Paper Value Innovation : The Strategic logic of High Growth • mianly focus on some important views • go over without any examples to explain deeply

23. The Paper(cont’d) Why do some campanies achieve sustained high growth in both revenues and porfits while some can’t? • companies’ fundamental, implicit assumptions about strategy • seek to make their competitors irrelevant through a strategic logic

24. The Paper(cont’d) Contrast the strategic logic of this approach to that of conventional approaches to strategy

25. The Paper(cont’d) Here is no what competitors are doing. • not take industry conditions as given • not focus on beating the competition but on creating a quantum leap in value so as to dominate the market

26. The Paper(cont’d) Value Innovators • look for the commonalities in what customers value • will to let some customers go as they target the mass of buyers • refuse to be constrained by their existing assets and capabilities • think in terms of a total solution for customers,even if that means crossing industry boundaries

27. A B C Product Service Delivery The Paper(cont’d) Three Platforms

28. The Paper(cont’d) Four Questions Which factors shoule be reduced well below the industry’s Standard ? Reduce Which factoer should be created that the industry has never offered ? Create Which of the factors that the industry takes for granted Shoule be eliminated? Eliminate Position Be Heading Which factors shoule be raised well above the industry’s Standard ? Raise

29. The Paper(cont’d) AD • If you have fallen into a tight focus on what your competition is up to, a quick read of this 10-page paper may be just the tonic to refresh your strategic thinking.

30. The Paper(cont’d) Conclusion • While less successful companies concern themselves with beating the competition, the more successful companies pay little attention to competitors, instead making them irrelevant through “value innovation”.

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