This PPT slide, part of the 69-slide Corporate Strategy Primer PowerPoint presentation, presents a comparative analysis of 2 fundamental concepts within corporate strategy: Strategic Business Units (SBUs) and Core Competence. It delineates how these concepts differ in their approach to competition, corporate structure, resource allocation, and the role of management.
Under "Basis for competition," SBUs focus on the competitiveness of current products, while Core Competence emphasizes the importance of interfirm competition to develop and enhance core capabilities. This distinction highlights the varying priorities in strategic focus—one being product-centric and the other competency-centric.
The "Corporate structure" section contrasts the SBU's portfolio of businesses organized by product-market relationships with the Core Competence's emphasis on a portfolio of competencies. This suggests that while SBUs may prioritize market segments, Core Competence encourages a broader view of organizational strengths.
In terms of "Status of the business unit," the slide notes that SBUs operate with a high degree of autonomy, controlling all resources except cash. Conversely, Core Competence positions SBUs as reservoirs of core capabilities, indicating a more integrated approach to resource management.
"Resource allocation" is another critical area of differentiation. SBUs treat discrete businesses as units of analysis, allocating capital accordingly. In contrast, Core Competence views businesses and competencies as interconnected, with top management playing a crucial role in resource distribution.
Lastly, the "Value added of top management" section underscores the strategic importance of optimizing capital allocation in SBUs versus the need for strategic architecture and competency building in Core Competence. The slide concludes with potential pitfalls of the SBU approach, such as underinvestment in core capabilities and a reluctance to share resources, which can stifle innovation and limit growth opportunities.
This slide is part of the Corporate Strategy Primer PowerPoint presentation.
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Strategy Development Growth Strategy Corporate Strategy Core Competence Resource Management Innovation
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