Bad Strategy: When Customer Value and Core Competence Don’t Align


I find myself reading a lot of Peter Drucker these days. My company has undergone a serious strategic shift and I like the perspective of Drucker at times like this. A passage from "The Effective Executive" this morning caught my attention. Drucker pointed out that core competencies have to align with value to the customer.

It is so simple, yet often we ignore that pairing. Companies can't just do things that they are good at, if customers don't value those things. And companies can't last if they do things that customers value but that they don't do very well.

If your core competence in an are involves speed – you do something quicker than rivals – that is irrelevant unless speed is the thing that customers also value. If you are in a market where customers value low cost while your core competence revolves around quality, the mismatch indicates that you won't be very successful.