Being selective about opportunities helps organizations invest wisely. Learn how to arrange your core competencies in a helpful chart so that you can quickly and easily appraise new ideas.
- One large aspect of strategic planning is deciding where you will or will not compete. A way I encourage organizations to think about that is to look at their core competencies. A core competency is something your organization is great at. I know your organization is probably good at a lot of things, but what are the two things you would hold up and say, we're better than anyone else at these two competencies. Allow me to offer a few examples. Core competencies could be things like the quality of your product, your ability to innovate, the efficiency of your supply chain, the strength of your brands, your technology infrastructure. There are a lot of things that you could be good at, so take a step back and say, how do we compete in the marketplace? Allow me to offer a couple of examples. Starbucks, I would argue that their two core competencies are the quality of their product and their service. Proctor and Gamble. Their core competencies would be marketing and product development, and their primary competencies are the ones they're going to play to first. So once you've identified your two primary core competencies, it's helpful to plot them against one another on a grid, and looking at competency one and competency two, and understanding will the market or the product or the initiative you're pursuing rely upon that core competency and how much from low to high and low to high for each of those two core competencies. For situations where an initiative or a market or a product plays very well to core competency one and very well to your second core competency, those are the types of opportunities that you should own. You should own that market. You should try to own that product category. For opportunities where neither core competency comes into play, and they're both irrelevant, those are the types of opportunities you should avoid. Because it's very difficult to be successful in a market where a product category where you don't have the required skills to compete there. Now there will be opportunities where your primary core competency does come into play. You should pursue those opportunities and they should be reasonably high priority. For other opportunities where your second core competency comes to play, but less so for your primary core competency, the one thing you're really great at, you should consider pursuing those opportunities. Because those opportunities might be attractive, they're just not as perfect of a fit as the ones where you own or your primary core competency is going to drive your success. So take a moment and step back from your organization and ask, what are we truly great at? What's first? What's second? And then that can form the types of opportunities that you're going to pursue.
- Define the principles of strategic planning.
- Identify forces used to assess the market.
- Explain how to conduct a SWOT analysis.
- Articulate how to establish guiding principles and set goals.
- Explain what strategic filters are used for.
- Describe the steps of a strategic planning process.