In this video, discover how to evaluate new ideas against an organization's core competencies.
- Once you've identified your core competencies, you should then look at the initiatives that you're thinking about pursuing to determine what your approach should be. This can mean markets you're thinking about entering, products or services you're thinking about launching, or new capabilities you're thinking about building. Let's look at an example. Let's imagine Starbucks was conducting this exercise. And as we define their core competencies, their primary core competency is the quality of their product from low to high in terms of the relevance of that competency in whatever initiative they're thinking about pursuing. The second competency that we looked at was their service delivery capability. Again, that competency being low to high in terms of its relevance for pursuing an opportunity. Let's evaluate some opportunities. Let's say they were considering launching a new holiday coffee drink. Well, as we look at the axis of product quality, this would be their product that they're launching, so it would be very high in terms of using that core competency. And that product would be sold by their baristas in their existing stores. So their ability to deliver service, that competency would come into play very much. So they should own that particular product category and pursue it vigorously. Now let's look at an opportunity where they have instant coffee that they're going to deliver to your home. So again, it's their product, so product quality, that competency, is very relevant, however, their service is irrelevant because they're not delivering it in their store. That's the type of opportunity that they should pursue, given the relevance of their quality of product. Another opportunity may be selling coffee mugs in their existing stores. And these are mugs that are created by another manufacturer. So, their quality competency doesn't really come into play. It's not their product. However, their ability to deliver service is very relevant since it's being sold in their stores by their baristas. So they should consider that opportunity. Last, if they're looking at launching a new product line, but that product line is going to be a low cost, commodity type of coffee product where the quality of the product is not very relevant, they're outsourcing the production of it, so it's low, and it's going to be delivered in discount retail stores that they don't own, entirely new retail chains. So their ability to deliver great service is completely irrelevant. That's the type of opportunity they should absolutely avoid. So as you look at your organization's core competencies and understand what you're great at, you can then use that to look at any opportunity you're thinking about pursuing, be it a new product, a new market, or a new initiative, and plotting on this grid to determine what your initial approach to that opportunity should be. And that will then help you prioritize the initiatives you think about pursuing, and the ones that you don't.
- 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.