<story><title>Yahoo announces 2,000 job cuts</title><url>http://finance.yahoo.com/news/yahoo-statement-131500015.html</url></story><parent_chain><item><author>lkrubner</author><text>I am frustrated to see a great company get destroyed like this.&lt;p&gt;Scott Thompson, CEO of Yahoo! says:&lt;p&gt;&quot;We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. &quot;&lt;p&gt;In the background, unstated but assumed, is the theory of business &quot;core competence&quot;. I believe the phrase was invented by by C.K. Prahalad and Gary Hamel in this May, 1990 issue of the Harvard Business Review:&lt;p&gt;&lt;a href=&quot;http://hbr.org/1990/05/the-core-competence-of-the-corporation/ar/1&quot; rel=&quot;nofollow&quot;&gt;http://hbr.org/1990/05/the-core-competence-of-the-corporatio...&lt;/a&gt;&lt;p&gt;Sometimes a great essay gets badly misinterpreted.&lt;p&gt;Since that time, there have been many, many books that have developed this idea. See &quot;Strategic Management and Core Competencies: Theory and Application&quot; by Anders Drejer.&lt;p&gt;Inspirational for this concept was what Jack Welch argued for while he was CEO of GE, during the 80s and 90s: the company must be in the #1 or #2 spot in any industry, otherwise they will leave that industry. This is taught to MBAs. I have the sense that most of them draw this lesson: shrink the company down and focus on whatever currently works. My concern is that this frequently means focusing on what works in the short-term, without much thinking about where growth will come from over the long-term.&lt;p&gt;The original essay by C.K. Prahalad and Gary Hamel can be interpreted in another way. This sentence sounds like it is describing Amazon.com, constantly inventing new services:&lt;p&gt;&quot;A few companies have proven themselves adept at inventing new markets, quickly entering emerging markets, and dramatically shifting patterns of customer choice in established markets.&quot;&lt;p&gt;When CEOs have no idea what a company should do in the long-term, they claim that the company is going to focus &quot;our efforts on our core businesses&quot;. There is absolutely no hope for a company that follows that strategy. Especially in technology, where things change quickly, one needs to be inventing the new, new thing, or one is dead.</text></item></parent_chain><comment><author>jpdoctor</author><text>&amp;#62;  &lt;i&gt;I believe the phrase was invented by by C.K. Prahalad and Gary Hamel in this May, 1990 issue of the Harvard Business Review&lt;/i&gt;&lt;p&gt;A quick search of google will show you it was around quite a long time before that.&lt;p&gt;&amp;#62; &lt;i&gt;Inspirational for this concept was what Jack Welch argued for while he was CEO of GE, during the 80s and 90s: the company must be in the #1 or #2 spot in any industry&lt;/i&gt;&lt;p&gt;Jack Welch took an industrial organization and mortgaged it.  GE capital was an enormous percentage of the company when he left.  Sure enough, a credit contraction caused GE to take a bailout in 2008.&lt;p&gt;He talked a great game, but their performance was exposed after he left.</text></comment>
<story><title>Yahoo announces 2,000 job cuts</title><url>http://finance.yahoo.com/news/yahoo-statement-131500015.html</url></story><parent_chain><item><author>lkrubner</author><text>I am frustrated to see a great company get destroyed like this.&lt;p&gt;Scott Thompson, CEO of Yahoo! says:&lt;p&gt;&quot;We are intensifying our efforts on our core businesses and redeploying resources to our most urgent priorities. &quot;&lt;p&gt;In the background, unstated but assumed, is the theory of business &quot;core competence&quot;. I believe the phrase was invented by by C.K. Prahalad and Gary Hamel in this May, 1990 issue of the Harvard Business Review:&lt;p&gt;&lt;a href=&quot;http://hbr.org/1990/05/the-core-competence-of-the-corporation/ar/1&quot; rel=&quot;nofollow&quot;&gt;http://hbr.org/1990/05/the-core-competence-of-the-corporatio...&lt;/a&gt;&lt;p&gt;Sometimes a great essay gets badly misinterpreted.&lt;p&gt;Since that time, there have been many, many books that have developed this idea. See &quot;Strategic Management and Core Competencies: Theory and Application&quot; by Anders Drejer.&lt;p&gt;Inspirational for this concept was what Jack Welch argued for while he was CEO of GE, during the 80s and 90s: the company must be in the #1 or #2 spot in any industry, otherwise they will leave that industry. This is taught to MBAs. I have the sense that most of them draw this lesson: shrink the company down and focus on whatever currently works. My concern is that this frequently means focusing on what works in the short-term, without much thinking about where growth will come from over the long-term.&lt;p&gt;The original essay by C.K. Prahalad and Gary Hamel can be interpreted in another way. This sentence sounds like it is describing Amazon.com, constantly inventing new services:&lt;p&gt;&quot;A few companies have proven themselves adept at inventing new markets, quickly entering emerging markets, and dramatically shifting patterns of customer choice in established markets.&quot;&lt;p&gt;When CEOs have no idea what a company should do in the long-term, they claim that the company is going to focus &quot;our efforts on our core businesses&quot;. There is absolutely no hope for a company that follows that strategy. Especially in technology, where things change quickly, one needs to be inventing the new, new thing, or one is dead.</text></item></parent_chain><comment><author>zmmmmm</author><text>&amp;#62; There is absolutely no hope for a company that follows that strategy.&lt;p&gt;Well said.  It may work or even be optimal in mature areas where there is little or no change.  But in a technology company failing to adventure into new areas aggressively is death. Consider that once Yahoo was the 800lb gorilla and Google was the tiny startup.   Where was Yahoo&apos;s Android? Where is their Google docs, etc?  They&apos;ve made lots and lots of small bets but they never made the big bets, at least, not successfully.  Now they are too weak to make big bets, but they should make them anyway, possibly under a different brand.</text></comment>