What are the Core Competencies of SK Telecom? (example: excellent service? good technology?)
What are their "Barriers to Entry" Do They Need to Overcome? (example: Are the Charging too LIttle? Too Much?
What are their Competitive Advantages? (example: YOU TELL ME!!! :-)
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It looks great
I insist that the core competency of KTF has two things, such as "Fun" and "Friendship". The two facts are the core competencies of KTF.
For example, the cost of phone call and mobile communication bill are cheaper than other telecom companies, and KTF has a lot of mobile contents. As we knows, many university students and secondary school students use KTF services, cause of the reasons that I mentioned above, even though the quality of telephone service is lower than SKT's one. Those services exactly show what KTF wants to tell customers. What KFT wants to tell customers is "Having a fun with KTF contents with affordable price, and I will be your friend". All of the KTF services are based on "FUN" and "FRIENDSHIP". This helps KTF can be going colser to customers and this facts is very important core competencies.
In details, the phrase of the latest CF is "Have a good time". This CF shows the image of KTF. And also, the brand new name of WCDMA of KTF is "SHOW". In fact, "SHOW" is next generation CDMA method. KTF offers that "SHOW" can be Life-Fun-Enabler to user. KTF show its own style and its goal through CF. As looking around the telephone cost, KTF offers interesting and convenient bill systems to teenagers and people in twenties. The systems are "BIGI" and "Na". Everythig I mentioned as examples, is based on "Fun".
I suppose the "Barriers to Entry" is the telecom field, especially 2nd CDMA field, is full. There are 3 companies in this field in Koream. Those are SKT, LG, KTF. These companies are sharing the field. Therefore, the situation keeps going on the same way, if a big accident doesn't happen.
The competitive advantage of KTF? That is a "high technology". The "SHOW" is a No.1 market share in the next generation CDMA service, so called WCDMA. The oldest CDMA telecom field is actually full. So, SKT and KTF developed a new CDMA servicefor their future. SKT's one is "3G+" ,and KTF's one is "SHOW". These companies showed these services at the very similar moment. But the result is not similar.
KTF used "Fun and Friend" ,that is the image ,that KTF acquired before through CF,contents and payment system, besides they added high technology image through WCDMA service. The result is "SHOW". KTF was focusing on the marketing effects, because KTF had full confidence in their technology. Even though WCDMA serive have been shown for a short time and KTF has many problems about the service, "SHOW" of KTF is a NO.1 share is very impressive result. That shows how much important is how to use the image of company and technology
I will put more information about KTF and "SHOW" on this blog. ^ㅂ^
What is a core competency? According to the article which we read in class “The core competence of the corporation (1990, C. K. Prahalad and Gary Hamel), a core competency is "an area of specialized expertise that is the result of harmonizing complex streams of technology and work activity." As an example they gave Honda's expertise in engines. Honda was able to exploit this core competency to develop a variety of quality products from lawn mowers and snow blowers to trucks and automobiles. To take an example from the automotive industry, it has been claimed that Volvo’s core competency is safety. This however is perhaps the end result of their competency in terms of customer benefit. Their core competency might be more about their ability to source and design high protection components, or to research and respond to market demands concerning safety. (Reference: http://en.wikipedia.org/wiki/Core_competency)
In my opinion, a core competency is something that a company or organization can do well that meets the four conditions based on the view of a resource base.
1. Is it valuable?
2. Costly to imitate?
3. Is it rare?
4. Exploited by the organization?
A core competency can take various forms, including technical/subject matter know how, a reliable process, and/or close relationships with customers and suppliers (Mascarenhas et al. 1998). It may also include product development or culture such as employee dedication. Modern business theories suggest that most activities that are not part of a company's core competency should be outsourced.
As coming to competitive global market, core competencies are very important to satisfy customer’s needs and gain more profit for a firm. Based on a 2G market in mobile, SKT, which had an affluence financial condition and a very functional auto frequency band (800MHz), was a number one company. It used “011” that was starting numbers of all of cell phones. For KTF, it was in the competitive disadvantage because it was founded 10 years later compare to SK and KTF used 1.8GHz which was poor than 800MHz. 800MHz is a lower auto frequency band so it is longer to reach a radio wave and even it is blocked by concrete, it is good to reach. And the number of KTF’s base stations has been less than SKT. Briefly, SKT had competitive advantage in a 2G mobile market owing to the barriers that were preoccupied power of SKT and disadvantage of an auto frequency band.
KTF tried to overcome SKT by characterized service, “Goodtime”, which offers best time, happy experiences, and satisfactory memory to customers. They also have offered multimedia services like Magicⓝ, Multipack, Fimm and developed mobile convergence services for example, K-merce, K•bank, K-ways. Innovative and experimental attitude is one of KTF’s a core competence.
Now, it is time for KTF. A situation has taken a new turn due to a 3G mobile. KTF has offered WCDMA service “SHOW”, which is one of KTF’s brands. A new specialized phone from KTF was sold for WCDMA. Also, KTF has offered characterized charge plan, different service so that they have preoccupied a 3G mobile market. As well as a 3G market, the starting numbers of cell phones were unified “010” so SKT brand power has weakened.
(http://www.ktf.com/front/IR/IR_Kor_go.jsp?sURL=/company/business/strategy.jsp&menuCode=05040000)
Colman:
Excellent job. Your points about KTF doing a product differentiation marketing strategy makes a sound argument.
Interesting too is your point of them implementing new technology to "leap frog" over (IE jump over something like a frog)the old technology, and offer new products and services with newer, superior technology.
This is exactly what happened with KDDI in Japan. They offered 3G CDMA services right away, in order to compete with the dominant marketshare of 2.5G NTT DoCoMo.
This is called "second mover advantage" (means the company that enters the market after the first guy) which we will talk about in our next class.
Ironically, in South Korea's history, you guys too (ultimately, though of course quite painfully) had a "second mover advantage" when the North Koreans invaded your country.
What do I mean?
To compare the situation to a company, the South Korean forces and then with the assistance of the UN, knew what the "competiton" (the North Koreans') strategy was (they had all ready invaded).
So in response, you knew the "market conditions" you were able to have a "second mover advantage" by knowing where to strike back effectively, via Gen. MacArthur's landing right here in Incheon!
But following this logic does that mean the Chinese when they crossed the Yalu River had a "3rd Mover advantage" I don't know. We could all write an academic paper together on it! :-)
Seriously though, I am in no way trying to make light of war or violence or the enormous suffering involved. Look at recent history.
However, it does bring up something for you guys to think about when we read & discuss these articles:
A major criticism of the business writings coming from the US is that we seem to constantly use War as an analogy - where someone wins/someone loses. It is known as a "Zero Sum Game". In the Short Run (IE over the next couple days, or months, or even a few years)this can be okay.
But in the Long Run (like after you guys graduate and start your careers) it is NOT the way to do good business.
If you want to succeed in business, life, etc., you want repeat customers. And the only way you get repeat customers is giving good service - meaning make peace, not war. Because war is a waste of "Capital' (Human, Intellectual, Social, Financial, etc.)
As an example, in my own OB class when I was getting an MBA in Boston, my professor showed us parts of the famous American movie "The Godfather".
"The Godfather" was the head of a very powerful Italian Mafia family (gangsters). His rival tried to have him killed to take over. The famous line in the movie by the rival is "I don't like violence. Blood is a Big Expense."
Good job at Colman's Factory! YOu are making very good "intellectual products" (ideas) from good acquisition and use of "Intellectual Capital". Keep Showing a Profit!!!!
Jin:
In a word "fantastic". You have taken the theoretical literature, intellectually synthesized it, and then supported your assertations with clearly articulated theory. Bravo!
Building on this, you then demonstrated your points by describing the "010" Vs. "011" and how it related to advantageous earlier forms of technology. Excellent analysis. Thank you for the citation too - it is extremely helpful. (Note everybody: Do this too!)
Your mentioning of the change of numbers to all "011" too is quite intriguing, as it has as you described, broken down a barrier to entry, and destroyed one of SKT's major competitive advantages.
Tell me, in Korea are you able to keep the same phone number when you switch from one company(say SKT) to another (say LG or KTF)?
This is known in the mobile industry as "Number Portability". When it has occured in other major markets, like the US, most mobile phone carriers were terified that they would lose lots of customers..so offered GREAT deals to stay loyal (as an MBA student myself then, I was very happy :-)
In reality though, not that many people switched. It was just too much of a hassle. I believe they call it "consumer intertia" but it is also related to a concept we will cover in next class "escalating levels of commitment". I will have to check with my marketing Professor and get back to you.
In the meantime, wonderful job, absolutely wonderful. While I know you have expressed interest in the Human Resources field, have you ever consider pursuing a career in Academia? You would make an outstanding researcher :-)
What are Core Competencies?
Core competencies are strategic business capabilities that provide a company with a marketplace advantage. Core competencies are the skills, abilities, knowledge, and characteristics that help distinguish superior performance and are the root essentials of a company's or an individual's expertise.
What is the core competency of KTF?
Well, first of all, last ten years KTF experienced many problems because of being a latecomer in the market, so they tried offering good services and wanted to clearly differentiate themselves from the competition. However, everything they tried was not enough, customers defined KTF as the second telecommunating company. Now, however, everything is changing, SKT is not always going to be the leading company because KTF is reaching beyond just being a mobile network provider,and they are defining their core competency as a "Infotainment" meaining Information + Entertainment,on and offline transactions, and global businesses. KTF created a whole new digital lifestyle for their customers by offering digital entertainment in the form of wired/wireless searching portal service, music, games and videos, and by expanding their business capacities to connect on and offline services for payment and banking transactions. The most important fact is that customers are showing many interest, because everyone wants to have a video communication, high-speed data services, global automatic roaming, USIM-based traffic, security, membership, credit card, and stocks services, video-based m-education, location-based search-engine services, phone messenger, address book and etc..
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