Core competencies are something I think about a lot. I love to dig into what makes companies or ecosystems or social groups tick. Especially when that core competency enables what they do:
McDonald's, for example, is a real estate company that happens to make burgers.
Walmart is a shipping logistics company that also sells things.
What other examples can you think of where the core competency of the company is such that the "thing" a company does falls out naturally as a consequence?
@jenniferplusplus@lorddimwit someone on LinkedIn mentioned that airline point programs generate more revenue than ticket sales. So there's an argument to be made there that gamifying micro transactions is a core competency of airlines which is wild to me
@hazelweakly@jenniferplusplus@lorddimwit this is... Complicated. For multiple reasons, this is a tricky financial engineering more than reality. The point programs generate revenues for non obvious reasons, which are not really micro transactions. It is a financial product. They could make revenue from tickets but it would be worse from a tax and financial analysis pov.
@hazelweakly@jenniferplusplus@lorddimwit i woulf say that they are an accounting optimisation specialist selling financial products to pensions fund/401k hedge funds more than micro transactions
@lorddimwit@hazelweakly@jenniferplusplus more a "you cannot comprehend the amount of money that get poured into 401k, so we have to find financial product everywhere to even be able to invest that much money".
Iirc last i checked 90% of the US public market is now hold by "institutional investors" aka pension/retirement schemes and endowments.
There is simply not enough shares to buy. You can plot the "ratio" of institutional investors ownership vs stock market and. Correlate. Over 20y.
@hazelweakly I heard it suggested in a business school lecture that McDonald's core competency is really food safety. A burger business can only scale when it knows how to get low wage staff turning raw meat into fast food without poisoning the customers. Even a handful of cases could be toxic for a global brand. Fix that and everything else follows
@papayaga@hazelweakly an increasing number of American pro sports teams are trying to make this shift (from a previous core competency of IP and marketing).
The DC NBA and NHL teams just tried to run this playbook in Virginia, for example, but apparently lacked the political skills.
@hazelweakly Lots of replies here so maybe someone's already said this, but an interesting thing I learned in the past few years is that Kroger is not well known for their core-competency, which is grocery manufacturing and supply chain logistics.
They appear to be a grocery conglomerate, but they supply actual manufacturing of foodstuffs to other grocery chains. They're an enormous force in the grocery business.
@hazelweakly I think about a similar thing for movies, for example Who Framed Roger Rabbit is really about car culture and highway construction in LA, while the movie is presented as a cartoon mystery
@hazelweakly 🤔 mcdonalds might be more of a "drop-shipping franchise investment income to real estate developers" platform than a real estate company in and of itself?
@hazelweakly Oooh, I once gave a talk about how I don't think engineering teams think about their core competencies enough and then decide to build stuff that they should probably buy instead.
@hazelweakly Neal Stephenson in Crytonomicon had something along those lines:
"The United States military (Waterhouse has decided) is first and foremost an unfathomable network of typists and file clerks, secondarily a stupendous mechanism for moving stuff from one part of the world to another, and last and least a fighting organization." https://archive.org/details/cryptonomicon0000step_b9v1/page/442/mode/2up?q=clerks
@hazelweakly I'm pretty sure Amazon makes far, far, faaar more money off of selling server space than they do off of retail. The retail store basically exists as a vestigial PR thing
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