A Case Study on the Growth Strategy of a Conglomerate Firm from Competence-based Perspective
Date Issued
2004
Date
2004
Author(s)
Chang, Yu-Fen
DOI
zh-TW
Abstract
The issue of business growth critically challenges managerial capabilities and therefore has been an important research issue in the field of strategic management. According to the fundamental strategy logic, there are two types of strategic logic for a firm in pursuing growth. One is outside-in approach, i.e., pursuing growth mainly based on external opportunities. We may call this as opportunity-based growth strategy. On the contrary, the other one is inside-out approach, i.e., driving growth mainly based on internal distinctive competence. We may call this as competence-based growth strategy. While these two approaches of strategic thinking are nevertheless interrelated, they may have different implication on the strategic choices on development path and resource allocations, which have received little attention in the previous literature. The present research attempts to take a qualitative approach to this interesting yet less explored issue by investigating corporate development history of a local business group, Chi-Mei, Inc., which has transformed herself from a global petrochemical giant to a major play in global TFT-LCD panel market.
To provide comparative industry backgrounds, we start from industry analyses on these two industries in which Chi-Mei involved. We then built the forty-year history of corporate development of Chi Mei in terms of major strategic decisions and subsequent resource allocations the company undertaken along the time line. We specifically emphasize on exploring how different competence levels were developed during different corporate development periods. By so doing, this thesis is able to provide various graphs depicting the interactions between competencies and business growth under which business growth logic of Chi Mei can be drawn.
Based on detailed comparisons between strategic activity systems of Chi-Mei in developing petrochemical and TFT-LCD businesses, we found that a great extent of similaries exists in business logic and competencies between Chi-Mei’s operations in the petrochemical and TFT-LCD industries. In other words, although they are different in industry characteristics, Chi Mei Optoelectronics actually leveraged the core competencies built by Chi Mei Corporation. Moreover, the dynamics between competency and business logic helps to explain the formation of the business growth strategy under the perception of the existence of external opportunities, the development of new competence in overcoming the limits of the environment, and leveraging the existing competences to sustain growth. Overall, we found that a company’s capabilities in building and leveraging competencies constitute the engine of sustaining business growth.
Subjects
能耐基礎成長
能耐延伸
個案研究
能耐建構
Competence Leveraging
Competence Building
Competence-based Growth
Case-based Research
Type
thesis
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