Core Competencies

A core competency is something a company does especially well in comparison to its competitors!

Some examples:
* Superior skills in producing high quality product
* Superior system for delivering customer orders accurately & swiftly
* Better after-sale service capability
* More skill in achieving low operating costs
* Unique formula for selecting good retail locations
* Unusual innovativeness in developing new products
* Better merchandising & product display skills
* Superior mastery of an important technology
* Unusually effective sales force

A CORE COMPETENCE is important because of
o Added capability it gives firm
o Competitive edge it can yield
o Potential for it being a cornerstone of strategy

COMPETITIVE ADVANTAGE is easier to build when
o Firm has a CORE COMPETENCE
o Rival firms do not have offsetting competencies
o It’s costly & time-consuming for rivals to match competency

OPPORTUNITIES (from SWOT) most relevant to a firm are factors in EXTERNAL environment offering

* Some kind of competitive advantage
* Important avenues for growth

External factors posing a THREAT to firm

* Emergence of cheaper technologies
* Introduction of new/better products by rivals
* Entry of low-cost foreign competitors
* New regulations
* Vulnerability to rise in interest rates
* Potential of hostile takeover
* Unfavorable demographic shifts
* Adverse shifts in foreign exchange rates
* Political upheaval in a country

Role of SWOT analysis
SWOT analysis helps answer key questions

* Does firm have internal strengths an attractive strategy can be built on?
* Which weaknesses does strategy need to correct?
* Do firm’s weaknesses disqualify it from pursuing certain opportunities?
* Which opportunities does firm have resources to pursue with a chance of success?
* What threats should firm worry most about?