You have two sections to this assignment - In APA format . 1. Create a core comp

Question

You have two sections to this assignment - In APA format .

1. Create a core competence "tree" for any company of your choice. You can use the format that I used in the lecture for Starbucks, or you can use a format from the "core competence" article on page 5, 12, or 13. You don't need to use the same number of boxes and other elements. (1 page)

2. Read the Chongqing Peace Medical case. Briefly summarize their core competencies and then talk about how they could use those to grow their company. (1 page)

Explanation / Answer

I am not aware of the Core Competence Tree that was explained to you in class but I can give you a perspective in terms of what this concept is and how the same applies to a company that I have worked in. For obvious reasons, I will not be able to divulge the name of the company.

Core competency as a concept was coined by C K Prahlad and Gary Hamel wherein they defined it as a unique amalgamation of resources and skills inherent with a company that helps in distinguishing it from its competitors.

There are few features that a firm must satisfy in order for a firm to create its core competency. Loosely, they are the following

To illustrate the point, take the example of a traditional lending institution operating in India. With a tremendous market potential and an every growing young population, India offers a market that is rocketing towards commercialization, driven a strong aspirational middle level income group. This forms the key target market for the lending institution.

Traditionally, this company relied on a lot of its processes being manual in nature. The transfer of loan application from point of sale to operation floor, located in Delhi. Assessing loan application forms, calling up customers for query resolution, credit history report generation-all of these critical processes were manual in nature. And with manual processes come two critical problems. One, it becomes time consuming and two, it becomes prone to error. In a service industry, turn-around-time was a key success factor.

Realizing this, firm started shifting to a completely digitized version and spawned a new name for itself, called FinTech Company (union of financial services and technology). 90% of the critical processes were digitized, all loan applications were routed through proprietary software that not only automated generation of credit history report but also with the help of decision tree algorithms, could give a credit decision within seconds. All this happened with minimal human intervention, resulting in lower TAT and errors as well.

From a TAT of 48 business hours as opposed to an industry average of 40 business hours, post digitization, the TAT of this company came down to an average of 4 hours (end to end).

Let’s look at this from the checklist mentioned above

It should provide benefit to the customer

It did benefit the customer immensely as the waiting time for a loan decision was drastically reduced.

The competitors should not be able to imitate the feature easily

The kind of technology infusion that happened is difficult for competitors to copy for several reasons (a) traditional mindset of core management (b) cost implications

It should enable the firm to leverage from multiple markets

From initially operating in only car loan segment, the said company started making loan products in business loan, commercial vehicle loan, gold loan and property loan space as well.

It will lend the firm a unique selling proposition

The TAT of 4 hours quickly became the defining feature of the said company and in the process the markets of giants underwent severe dents because of this company stealing market share.

For the second part of the question, I could not find the Chongqing Peace Medical case anywhere on the web.

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