Understand Your Company’s Core Competencies
Last week, the Fire Enterprises, Inc. (FEI) tribe discussed why understanding market need for potential products is a crucial early step in the product development process. This week, the topic around the FEI conference table is why a company’s product development efforts should derive from knowledge of its core competencies. Remember, fire = print.
“What is our company good at?” Lucy asked.
“Making fire?” Zoot suggested. “Lighting hearths?”
“Pyro and Flintstone offer those services as well,” Lucy countered. “What does FEI offer that allows us to remain competitive in the crowded fire marketplace?”
“Lots of runners and fast chariots,” Zoot offered.
“Great! FEI’s ample supply of runners allows us to deliver products to the outer corners of Olympus in less than a day. ‘Competitive turnaround times on fire products for businesses and hearths’ is one core competency.”
“Can any aspect of our business be a core competency?” Marka asked.
“Not quite," Lucy explained. "A core competency is a specific trait that is central to the way our business works, and will usually fulfill three different criteria:
• “Provides benefits to end users.”
• “Competitors can’t imitate it easily.”
• “Can be leveraged to gain a strategic advantage.”
“Now that we understand what a core competency is, let’s list some of ours,” Lucy said.
“Sterling customer service; durable torches, matches and lighters; unparalleled industry expertise,” Zoot listed off on his fingers.
“Forty years of experience in the fire industry,” Marka offered.
“Wonderful, tribe!” Lucy shouted. “We can use this understanding of our core competencies as a springboard for product strategy development activities. Developing products that are in line with our business strengths will allow us to fully capitalize on market opportunities.”
“I think I get it,” Org said. “We understand FEI’s core competencies and what they mean for product development. What’s next, Lucy?”
“Um.” For once, the young product development whiz was stumped. “I’ll have to get back to you guys on that one tomorrow,” Lucy said, then nervously snuck out of the room with the eyes of every tribe member on her.
Today’s FIRE! Point
Before considering new product development, examine your company’s core competencies. What are you good at? What are you best at? Perception is reality. Don’t be afraid to build on marketplace perceptions to create these cornerstones of a company’s value.
Ideally, your core competencies fill a niche underserved by current products. Just because a product niche appears to be filled, however, doesn’t mean that you can’t aggressively attack this first choice market. If you have a core competency that suggests a market share grab will work, it may be the right decision.
FIRE! in Action
In Doubt of What Benefit Your Product Can Offer? Lead with Green
Clorox identified a market need for “green” cleaning products and launched several new product extensions under its “Green Works” brand. The result? Each Clorox product immediately jumped to the head of the product category, and even grew the overall naturals market by 300 percent.
Next week: Product talk continues with a discussion on the Product Lifecycle Curve.