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Re-visiting core competency to stay relevant in business

I recently read an interview with John Sculley, who was successfully enticed from PepsiCo to join Apple almost three decades ago by Steve Jobs - "Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?".  Ultimately, they parted ways and rest is history. An interesting statement made by John Sculley in this interview is "... App Store and the Apple Store are as much a part of the "experience marketing" as the products themselves".

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I recently read an interview with John Sculley, who was successfully enticed from PepsiCo to join Apple almost three decades ago by Steve Jobs - "Do you want to sell sugar water for the rest of your life or do you want to come with me and change the world?".  Ultimately, they parted ways and rest is history. An interesting statement made by John Sculley in this interview is "... App Store and the Apple Store are as much a part of the "experience marketing" as the products themselves".

We all know Apple is known for its superior joined-up customer experience, but the quote did trigger a chain of thought - when did Apple re-define its core-competency from just marketing and selling products to marketing and selling "experience" with an accompanying product / service? Was this a conscious transition or just happened over a period of time? What drove the transition - their customers or competitors or their visionary leader? Are there any parallels to be drawn here and applied to other companies?

Thinking beyond the Apple example, some of the other recent cases I have come across wherein companies are re-drawing their business boundaries and core-competences include:

  • Online giants Amazon and Google exploring opening up brick-and-mortar stores in US and Europe
  • Google re-transforming itself from being a leading search engine to wanting to become dominant player in mobile and ecommerce space
  • TV manufacturers such as Samsung transforming themselves from making an "idiot" box to "smart" boxes

Given the technological revolution markets and consumers are undergoing, I am increasingly convinced that companies need to re-assess their core competencies regularly to stay relevant. Potential drivers for this re-assessment could either be internal (e.g., a break-through invention or an innovative idea a company had stumbled upon) and/or external (e.g., convergence of technology, communication and entertainment leading to digital revolution). So, key questions every company leadership team need to ask themselves during their strategic break-outs include:

  1. What business are we in? Are there any significant changes to our market/ competitors/ consumers? If so, what is driving the changes?
  2. Is our core-competency still relevant to our business and the eco-system? If yes, how is it relevant? If not, why it is not?
  3. What are internal and external factors enabling and impacting this relevance? 
  4. Are there any new developments that could possibly impact this relevance in near future?

These questions could throw open plethora of unexplored opportunities (and of course challenges) and with right guidance, approach and mind-set, they can re-invent themselves to stay relevant to their market and consumers.

I'd like to hear your views. What do you think about this need to revisit core competencies. Do you agree or disagree? Let me know your thoughts.

Comments

Another nice one, thanks, Satish. Core competencies defines the scope of operation very well, and then allows the organisations to excel in them. I think companies can grow fast by focusing on core competency provided if they are small. But company like GE focused on many businesses like Countrywide Finance to grow and expand faster, after it reached a critical mass.

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