Principles of Marketing
Q No: 1
Find out the Core Competencies of the following organizations:
a Tata Motors
b HLL (Hindusthan Unilevel Ltd.)
A core competency is a concept in management theory advocated by CK Prahalad, and Gary Hamel.Core competencies are the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. A core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers and should also be hard for competitors to replicate.
Tata Motors is able to maintain, as well as increase, their market share by capitalizing on their core competencies.Tata Motors is active, competitive, and dynamic in all aspects of the automotive industry, which means that there must be many different activities going on in all areas of the company. As a result of the ever evolving automotive industry Tata Motors must always be changing and one way to stay at the forefront of the industry is to make continuous improvements in technology through research and development.One way that Tata Motors has done this is by producing one of the most efficient and low cost vehicles on the market.Acquisitions, mergers, and expansion is another core competency that Tata Motors has is embedded in their company structure and philosophy. Another core competency that Tata Motors holds is being located in the India.This location has allowed them to understand not only the Indian market but also the dynamics of emerging and developing markets.This market understanding and knowledge allows Tata Motors to manufacture their products at lower costs, sell them to emerging markets while making profits as well as take advantage of the strong labor base in India.
In order to compete with other emerging products in the market HLL adopted an new strategy and redefining its core competencies in 2001. Unilever announced its new strategy ‘Path to Growth’ reducing the number of products from 1,200 to 400 and thereby shifting focus to Unilever brands.
Unilever also developed an new competency model, the Leadership for Growth Profile (LGP), which combines the following components
First, everyone in the company is expected to create growth vision. Growth is considered the key criteria for employees’ behavior at Unilever.
Second, everyone has to drive growth through implementation and to energize others for growth.
Third, it is important to secure commitment to growth. And by defining a new set of LGP competencies/factors and using it for management development and recruitment Unilever tries to change manager’s behavior and increase behaviors which are more linked with achieving strategic goals for growth
Along with these policies the company employed excessive resources to strenghten its reach to the consumers, Distribution network is the core competency of hindustan unilever. In India one can find the products of this company in almost all cities and villages, that is, even in the most backward and hard to reach places.
To expand product lines with minimum investment, Ranbaxy utilizes the various small scale industries available for manufacturing services.It provides these companies with API and dosage form development, to allow Ranbaxy to focus on marketing and selling the product. This is an efficient way to diversify product lines and increase profit margins.
Sales and Marketing
Ranbaxy has set itself apart in the marketplace through the rapid expansion of its product line and its willingness to emulate complex drug formulations. Ranbaxy aggressive expansion gave it an competitive edge over others and thereby giving it an strong hold in the market . Ranbaxy has a commercial advantage as many of the high-profit branded drugs with expiring patents over the next few...
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