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HAMEL _ PRAHALAD MODEL by SmritiKushwaha

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									HAMEL & PRAHALAD
     MODEL
       Leveraging
   Core Competencies
              DEFINITIONS
 Building core competences, resource strengths
  & organisational capabilities which rivals cannot
  match is the best way to outperform them
 Core Competencies rarely consist of narrow
  skills or the work efforts of a single department
 More often they are bundles of skills & know
  how growing out of the combined efforts of
  cross-functional work groups along the value
  chain of the company
               DEFINITIONS
 Since they reside in collective efforts it is the top
  management to build/nurture core competencies
 Leveraging them mean concentration of more
  effort & talent than rivals on
  deepening/strengthening these competencies
 Since requirements of competencies vary widely
  bases of competencies need to be broad &
  flexible
        STRATEGIC INTENT
 Staking  out a particular business position
 “Big, hairy, audacious goals” BEHAG
 Very long term ( 20/30 years)
 Komatsu in the 60s was one-third the size
  of Caterpillar, with little presence outside
  Japan depending on small bulldozers- but
  strategic intent was to “encircle” Caterpillar
        STRATEGIC INTENT
 Lotus in software & Honda in small engines
  leveraged the expertise of their talent pool by
  frequently re-forming high intensity teams and
  re-using key people n special projects
 The experiences of such companies tell u that
  the usual keys to building core competencies
  are superior selection of employees, training &
  retraining, cultural influences, networking,
  empowerment, incentives, organisational
  flexibility, short deadlines, databases and not big
  operating budgets
     SEARCH FOR STRATEGY-
       CRITICAL ACTIVITIES
 Identify strategy-critical activities- administrative
  and support functions are generally routine
  activities
 Among primary value chain activities are often
  crucial functions which have to be performed
  exceedingly well like fast check in/check out,
  room service, food service in a hotel,
  purchasing, production, promotion in chocolate
  industry, buying quality cocoa beans at low
  prices reduction of a cent per bar can mean a
  seven figure improvement in the bottom-line
 REASONS FOR OUTSOURCING
  STRATEGY “NON-CRITICALS”
 Managers often spend lots of energy and time
  on bureaucratic support groups and that
  distracts them from strategy-critical activities
 Each supporting activity in the value chain is a
  “service” which constitute the bulk of the
  overhead costs
 Outsourcing them leads to lower costs, speeds
  decision making, sharpens focus on critical
  activities and cuts bureaucracies
             PARTNERING
 Partnerships add to the firm’s arsenal of
  capabilities and competencies leading to
  sharper strategy execution
 Coke & Pepsi cultivate their bottlers and
  distributors
 Automakers regularly work with their suppliers
  for advancing design and functioning of auto
  parts
 McDonalds work closely with their franchisees
     STRATEGY CRITICALS AS
        BUILDING BLOCKS
 A change of strategy leads to emergence of new
  critical activities, competencies
 Hence a changed or new strategy cannot be
  executed with an old structure- need for
  Strategy-Structure fit
 Some strategy-critical activities- filling customer
  orders accurately and promptly, speeding new
  products to market, improving quality of product
  and service, SCM, effective use of the Internet.
  Getting feedback from customers
    DESIGNING THE FUTURE
 Whose future are we stepping into?- designed
  by us or others
 How do w design the future?
 Today’s competitors are the collaborators in
  planning and designing the collective future- the
  products which will be in use, say, 15/20 years
  down the road- competitors can compete in
  future again while designing the future from that
  point of time
EXPEDITIONARY MARKETING
 Exploratory   Marketing assumes that time
  will wait for us. Will it?
 As the things keep on speeding up in the
  future every marketing
  research/exploration will be through
  floating a new product
 The products will be in a state of
  continuous redesign- mass customisation

								
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