Core Competencies vs. Strategic Business Units Analysis PPT

This PPT slide, part of the 24-slide Core Competence Model PowerPoint presentation, presents a comparative analysis between Strategic Business Units (SBUs) and the Core Competence Model, emphasizing the need for organizations to adapt in a rapidly changing technological environment. It outlines key dimensions where these 2 concepts diverge, highlighting the importance of developing core competencies rather than solely relying on the performance of individual business units.

The first dimension, "Basis for competition," indicates that SBUs focus on the competitiveness of current products, while the Core Competence Model emphasizes the importance of interfirm competition to build and sustain competencies. This suggests that organizations should look beyond immediate product performance to foster long-term capabilities.

In terms of "Corporate structure," SBUs are described as portfolios of businesses aligned by product-market relationships. In contrast, the Core Competence Model organizes around competencies, core products, and businesses, indicating a more integrated approach to resource management.

The "Status of the business unit" section reveals that SBUs enjoy autonomy, owning all resources except in failure scenarios. Conversely, the Core Competence perspective views SBUs as potential reservoirs for core competencies, suggesting a more strategic utilization of resources.

Regarding "Resource allocation," the slide notes that SBUs analyze discrete businesses, with capital allocated on a business-by-business basis. The Core Competence Model shifts this focus to businesses and competencies as the unit of analysis, indicating that top management should allocate capital and talent based on strategic priorities.

Lastly, the "Value added of top management" highlights that SBUs aim to optimize corporate returns through capital allocation trade-offs. In contrast, the Core Competence Model advocates for enunciating strategic architecture and building competencies to secure future success. This comparison underscores the necessity for organizations to rethink their structural and strategic frameworks to thrive amid disruption.

This slide is part of the Core Competence Model PowerPoint presentation.

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