The Core competence of the Corporations

The growth of the company depends on the ability of it to maximize the advantage of core competency. The corporation should clearly identify the core competency, develop an appropriate strategy to cultivate them and establish good platform in that field.

The diversified organization finds tough to establish itself and grow continuously because they have several business units to be taken care of. The market being dynamic the targets and the boundaries change very frequently.

The corporation can sustain itself in the market by introducing innovative product which has very essential features for the buyers to neglect or to develop a new need for them which the customers haven’t thought of. This is easy to say but it requires very huge change within the organization. The management should understand the external environment well and create a strategy which is flexible. The principles of management have to be reformed since the most of the activities are just concentrated on the immediate result.

The corporation has to identify the fields which are complementary and inter-related to the core competency. This is important in the sense that while developing the strategy the expertise in inter- related fields will help to improve the quality of the product.

The organizations can go for collaboration with the experts of the field related to its core competency so they can learn about the field make themselves expert in it.

The corporation’s structure is also very important for the growth. There may be lot of smaller units within the organization but they must be centralized so as to achieve the goal of the company.

The success of the company on the longer run is highly due to the talent to build a new product at higher quality, lower cost and in a faster way. They also should be able to fit and upgrade themselves according to the changing environment.

The core competency for an organization is like the foundation of the building. The longevity of the building depends on the foundation and so is the success of the organization.

The collective learning in synchronizing diverse production skills and mix various streams together is known as core competency.

The core competency enhances on continuous use. It has to be raised and protected and continuously used to get the expertise in the field.

The company should concentrate on the process especially related to its core competency. This is to get an edge over the competitors.

Implementing core competency doesn’t mean that that lot of research and development has to be done. The core competency should be unique to an organization and cannot be followed by the competitors easily. It helps the company to enter various markets and to provide significant contribution towards the benefits to the customers.

The opportunity that arises has to be utilized properly. This will improve the company’s core competency. The organization shouldn’t lose its core competency while they are in the collaboration.

The company to achieve leadership in the core competency tends to increase their productivity and capture more market share worldwide. The control in the core products helps the company to lead the way in the future developments of similar products.

When the company fails to increase its potential by imprisoning its competency and diversifying its business tends to lose its position on the market. The employees with the competency also tend to develop new innovative products and lose their skills and knowledge slowly.

It is quite important for the top management to develop its own map to the success on the basis of core competency and it’s constituent. This will give clear picture to the employees about the company’s new targets and help them in achieving the necessary skills. It will also help in allocating the resource appropriately. 

Is Sony Turning Around?

The year 2009 saw the pioneer of the world’s consumer electronics, Sony group reporting its first operating loss in 14 years. They prided themselves in their unique innovative technology and focus on high quality. Yet their premium-priced products did not accommodate the changing needs of the consumers for more innovative cost-effective ideas adopted by their competitors. Isolation from the technology of the rest of the world and insistence on their own Sony technology led to the isolation from the rest of the world, or galaponi-zation as referred by the Japanese. The re-structuring efforts of the company while maintaining its tradition is a challenging task ahead.

The journey of Sony from the year 1946 to year 2009 has been a study of its own. The internal resistance to the change played a big role in shaping the future of the Sony. The different business divisions and the concept of “company within company” under Norio Ohga worked well for improving the margins of the respective divisions but failed in realizing the goals of the company in the long-run. Its stringent technology measures to support their own technology in every product and service made them inflexible in the eyes of consumers. For e.g. the sony mp3 required conversion of the media files; downloading of the music  from the contract websites only; slow in catching up with the LCD technology are a few examples of  Sony’s excessive pride in their own technology. The insider system is also another major hurdle to the re-structural efforts of the company. The company has a long history of all Japanese CEOs and the too-many board members prohibited company’s move from growth and efficiency.

The company hired a new non-Japanese leader, Howard Stringer for re-structuring. He is made the head of US. Stringer faced dilemma between the American vision for results and Japanese worship for tradition. He is also faced with the dilemma of improving the communication between the different business divisions and the division heads. The problem of lack of communication was so huge that it affected the relationship of Sony with other players as Dell, Toshiba. Another problem in front of Stringer was the proud veterans and engineers. There was no coordination among the employees; the senior engineers were arrogant and not gave the due credit to the leader.

The future of the Sony is very blur if they don’t adapt as Apple and Samsung. The changing needs of the customers have to be understood. The organization needs to be flexible for the employees as well for the customers. The Japanese conglomerate may be out of competition if they don’t incorporate the changes while maintaining their legacy.  The legacy may not come into a rescue unless the need to preserve it does not urge.

CULTURAL IMPLICATIONS:

As Sony fall behind the global competition, it’s time for certain serious re-structuring by Stringer. Stringer faced the dilemma of striking balance between the American and Japanese vision. As a non-Japanese leader, it was more difficult to win the confidence of the employees. The communication process was another major hurdle. While American believes in frank communication; the Japanese didn’t believe in communication at all. Stringer will face strong internal resistance from the employees. They may also perceive it as a threat to their legacy.

OVERCOME INTERNAL BARRIERS:

Stringer should focus on improving the coordination among different business divisions so that the problem of television and audio speakers mismatch does not occur again.

The communication process should be made more transparent.

The employees should be rotated from different divisions and countries to learn the cultural aspects better.

COMPETITIVE POSITION:

Stringer should define the focus of the company. The mission and the vision of the company should be revised.

Incorporate the technology around the world quicker; delay will give an advantage to other players.

 Another Japanese conglomerate around the same timeline is Toyota. Toyota is known for the distinguished culture practices at its workplace. They have been able to incorporate change elements and be flexible unlike Sony. This uniqueness made them successful globally. Although they are in different business areas; Sony can take lessons from Toyota to bring change and be adaptable.  

Apple Inc.

At the present scenario apple is one of largest vendors of personal computers in the world with record revenue of US 46.33 billion. Apple always followed a vertical integrated model for the last few decades which integrate hardware and software together; this is the main success factor of apple when compared to other PC makers who does the other way round by outsourcing some of its work to others.

At the beginning, when apple was launched it was the idea of Steve to follow vertical integration strategy for the company because he did not trust any outside party for product development. Apple was doing well at the beginning but treat of IBM was growing in the early eighties and the failure apple 3 made apple to loss its hand in the PC market. Steve jobs realized that IBM PC was mainly designed for corporate customers and Mac was designed for consumer market and for the same reason there was disagreement with sculley who believed in traditional distributor system and want Mac as a business tool. Due to this disagreement Steve was thrown out of apple which results in the collapse of the whole company later.

When Steve was called back to apple after a decade he was very methodical in allocating his resources , like he cut down the R&D spending and also removes all the product line to focus only on PC’s and laptops.

In the early 2000 apple was focusing its innovation in two areas ie hubs and spokes and was successful up to a great extent. iTunes was another innovative idea from apple which almost changed the concept of hearing music.

Steve has a different concept of retailing when he started the first apple store in Virginia, Steve felt that his products should be sold in separate outlet rather that with his competitors products which was actually a different concept all together. There was a halo effect prevailing the market after the launch of apple iPod and Steve always gave importance to products rather that profit and was successful up to a great extent.