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/KIT database ? Galileo/Travel/ Spencer Lin Vasu Krishnamurthy ? Giddings Lewis/Machine Tool/Vasu Krishnamurthy ? Osh Kosh B’ Gosh?SP/Retail/Mike Weiss ? PwC MCS/Consulting/Vasu Krishnamurthy ? Save Prosper/Banking/KIT database ? Paul Elkin, “Mastering Business Planning and Strategy: The Power and Application of Strategic Thinking” ? Robert M. Grant, “Contemporary Strategy Analysis” ? Henry Mintzberg, James Brian Quinn, Sumantra Ghoshal, “The Strategy Process” ? Henry Mintzberg, James Brian Quinn, “The Strategy Process: Concepts, Contexts, Cases” Source List Core Competency Analysis Summary Core Competency Analysis provides a practical and systematic process to identify a pany’s core petencies and assess key petitive advantages. Examples of Core Competency Models: Core Competency Analysis Marketing Example: McDonald’s Customer Refill Support Sales/ Distribution Other Customer Service Critical Strategic Capabilities (SC) The capabilities in which a pany is a leader. These capabilities are the source of petitive advantage. Critical Enabling Capabilities (EC) The capabilities in which a pany is petitively equivalent to other market leaders. These capabilities are often the source of a barrier to entry. Strategic/ Financial Planning Technology Development Product Development Mfg/Joint Venture Core Competence (CC) A petence which delivers a sustainable petitive advantage in current markets, provides access to a wide variety of markets, and makes a significant contribution to the perceived customer benefits of the end product. Primary Capabilities (PC) Minimum functional and technical requirements necessary to participate. COMPETENCIES MODEL FRAMEWORK ?Fast, affordable, fun, family dining experience ? Marketing and brand mgmt. ? Training ? Franchise mgmt. ? Product innovation ? BigMac recipe ? High quality, low price product sourcing ? Efficient operation ? Hamburger preparation ? Menu selection Essentially about catching upGives unique advantageHard to copyEasy to copyCapabilitiesCore CompetenciesStrategic RequirementApproach Core Competency Analysis When To Apply Employ Core Competency analysis to evaluate a pany’s capabilities in each function of the value chain with a hierarchical model which identifies capabilities and the degree to which they provide petitive advantage and can be leveraged. Please note that there is a risk of defining too narrowly the market in which the client petes, thus focusing on the wrong petency requirements or a subset of the petencies required to effectively pete. It is key that those projects and programs that aim at developing core petencies should not be open to reprioritization at a later stage. Adhere to the following guidelines when analyzing core petencies and developing a Competencies Model Framework: ? Interview pany senior management and business line management as well as petitor management ? Define pany’s business system and activities performed within each function Based on the total range of capabilities identified, ask the questions: ? Which ones do we have to be “good at”? ? Which ones do we have to be “market/world leading at”? ? Determine whether each activity is a primary capability, a critical enabling capability, a critical strategic capability, or a core petence, based on the degree to which the activity provides petitive advantage and can be leveraged ? Note that while all the identified capabilities will be critical to achieve the vision and strategy, the questions will help distinguish core from noncore by invoking management attention and reflection in a systematic and structured manner Citations Client and Industry Experience Core Competency Analysis ? Galileo/Travel/ Spencer Lin Vasu Krishnamurthy ? Giddings Lewis/Machine Tool/Vasu Krishnamurthy ? MetLife/Insurance/KIT database ? PwC MCS/Consulting/Vasu Krishnamurthy ? Save Prosper/Banking/KIT database ? David A. Aaker, “Developing Business Strategies”, 5th Edition ? Robert M. Grant, “Contemporary Strategy Analysis”, 3rd Edition ? Michael Gould, Andrew Campbell, Marcus Alexander, “CorporateLevel Strategy: Creating Value in the Multibusiness Company” ? Henry Mintzberg, Bruce Ahlstrand, Joseph Lampel, “Strategy Safari: A Guided Tour Through the Wilds of Strategic Management” ? Henry Mintzberg, James Brian Quinn, Sumantra Ghoshal, “The Strategy Process” ? Henry Mintzberg, James Brian Quinn, “The Strategy Process: Concepts, Contexts, Cases Source List Establish Segmentation Objectives Data Assessment Model Construction Build Closed Loop Performance Tool What are the objectives of the segmentation? Better ROI, redistribute spending, change sales efforts? What data is needed to meet the objectives? How much of that data can be obtained internally? externally? What data is essential to the segmentation? What data can be a focus for further improvement in the future? Define the variables of the model with accessible data? Develop an analytical tool that utilizes the variables to determine a customer ranking or grouping (ie most ideal partner to most inefficient partner). Refocus internal efforts based on segmentation oute. Establish a way to capture the key data needed to segment customer base. Utilize the data on an ongoing basis to improve performance and continually reward the better performing customers. Customer Segmentation Methodology High level work flow for a customer segmentation Customer Segmentation Methodology Summary