A key step in strategic planning is the identification of an organization’s core competencies and the development of a plan for building and deploying those
competencies. A core competence is a bundle of skills and technology—not a specific service or product area. Core competencies can cut across service lines
and business units and provide a foundation for diversification.
Core competencies are the foundations of an organization’s competitive success and include the following characteristics:
Market Access: A core competence provides potential access to a wide variety of markets.
Customer Value: A core competence should make an important contribution to customer perceived value of the end product/
service.
Competitor Differentiation: A core competence should illustrate clear competitor differentiation and be difficult for a
competitor to imitate.
Extendability: Core competencies are the platform for future success of new service development.
Gary Hamel and C.K. Prahalad in Competing For the Future have developed a core competence-product matrix to use as a guideline to competence acquisition and
deployment. To receive a copy of the Core Competence Identification Table, e-mail us at phg-inc@ix.netcom.com
The focus on core competencies can be a helpful step in a strategic planning retreat. The examination can include a focus on:
Identification of existing core competencies
Assessment of potential to build on core competencies
Assessment of potential to acquire new core competencies
In today’s health care environment, strategies to acquire new core competencies may include building the competency through hiring new staff or training existing
staff. It may also include an examination of the market, and a focus on partnerships, joint ventures, mergers and acquisitions.
The identification and nuturing of core competencies allows organizations to have a specific strategic focus. Core competencies allow concentration on the core
services that ensure singular market strength.
A core competency analysis may also point to the need to eliminate, reduce, or outsource activities in which the organization cannot gain superiority.
An analysis of core competencies can help organizations become "beyond customer-led." Organizations need to stretch the boundaries of their current opportunity
horizon as illustrated in a diagram adapted from Competing for the Future. To receive a copy of the Beyond Customer Led diagram, e-mail us at
phg-inc@ix.netcom.com
