A strong end focus is a necessity in an organisation but it should be supplemented by an equally importance view of the core competencies of the organisation.
This matrix was designed by Gary Hamel and C.K Prahalad and was developed as an aid in setting specific acquisition and deployment goals.
A company should not only be viewed as a portfolio of products or services but also as a portfolio of core competencies.
A core competence is a bundle of skills and technologies that enables a company to provide a particular benefit to customers. It is something a company does especially well in comparison to its competitors.
An important function of strategic management is uniting a company's technological, production, and marketing know-how into competencies that improve its competitiveness.
Three tests can be applied to determine a core competency:
A core competence provides potential access to a wide variety of markets
A core competence should make a significant contribution to the perceived customer benefits of the end product
Finally, a core competence should be difficult for competitors to imitate
Key competence management tasks include:
Identifying existing core competencies – competencies must be separated from the products and services that they are embedded in
Establishing the core competence acquisition agenda – the competence-product matrix is used to distinguish between existing and new competencies, and between existing and new product-markets
Act on the positioning on the competence product matrix – this entails building new competencies, deploying existing competencies and protecting and defending existing competencies
The matrix made up of four quadrants
Each of the axes is divided into two segments – the x-axis assesses the newness of the product-market being investigated and the y-axis distinguishes between new and existing core competencies.
Each quadrant is represented by a question, which is to be asked of the core competencies and product-markets.
The four quadrants are termed Premier Plus 10, Fill in the Blanks, White Spaces, Mega-Opportunities.
The best use of this matrix is to prepare the information that is needed to put together strategies for the future.