Strategic Marketing. Lesson 7. Core Competence and Finding Growth Opportunities

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🎯 Lesson 7. Core Competence and Finding Growth Opportunities

🌟 Core Competence

Running a business means juggling many operations. But sustainable success comes from focusing on what your company does best.

Think of it this way: 🎶 A musician hires a producer so they can focus on making music, not on contracts and promotion. In the same way, businesses should delegate non-core processes — like cleaning, IT, logistics, or even parts of marketing — and concentrate resources on what creates the most value for customers.

According to Philip Kotler & Kevin Keller (Marketing Management):

• A core competence is a source of competitive advantage that creates real value for customers.
• It must be applicable across multiple markets.
• It should be hard for competitors to imitate.

✅ Positive Examples (recognized and used effectively)

1. Starbucks

• Core competence: Operational management + standardized customer experience.
• Advantage: A customer knows they’ll get the same coffee quality and “third place” atmosphere anywhere in the world.
• Applicability: Competes not only in coffee, but in lifestyle, co-working, and digital loyalty.
• Hard to copy: A global operating model + powerful CRM (personalization through the mobile app).

2. Costco

• Core competence: Unique procurement and logistics model.
• Advantage: Lowest prices while maintaining quality. Customers trust they’re always getting the “best deal.”
• Applicability: Works in FMCG, electronics, pharmacy, even insurance.
• Hard to copy: The paid membership + strict margin discipline can’t be replicated by Walmart or Target.

❌ Negative Examples (missed or lost core competence)

1. Blockbuster

• Potential competence: Nationwide film distribution.
• Mistake: Saw itself as a “DVD rental business,” not as an “entertainment distribution operator.”
• Lost to Netflix, which doubled down on distribution (first by mail, then digital).

2. Sears

• Potential competence: The strongest U.S. distribution + catalog system (a precursor of Amazon).
• Mistake: Believed their strength was assortment and retail, not logistics.
• Amazon took over by scaling exactly what Sears failed to reimagine.

🏕 Core Competence in Our Party Rental Company (Wake County, NC)

Since our company is young, identifying a true core competence is still in progress. But even a new business can build a strategy around it using Bain & Company’s 8-step method — and validating results against Kotler & Keller’s three criteria.

Step 1: Identify strengths

📊 From Yelp, Google, and local forums, customers consistently value:

• Clean and well-maintained inventory
• Honest pricing (no hidden fees)
• On-time delivery & setup
• Attentive, personal communication

Step 2: Benchmark against competitors

Competitors: hidden fees, delays, poor communication.
Our company: ✅ transparent booking, ✅ real photos, ✅ free delivery in Wake County ($100+), ✅ “turnkey” setup option.

Criteria	What clients value	Our Party Rental Company
Communication	Fast, attentive	Personal support via phone & email
Inventory quality	Clean, reliable	Real photos, sanitized after every use
Delivery & setup	On-time, stress-free	Free, scheduled delivery + setup option
Booking simplicity	Convenience, but hidden fees	Transparent online booking 24/7
Extra services	Variety, safety	Tailgate packs, games, coolers
Loyalty	Almost none	Rewards program for repeat clients

Step 3: Invest in what clients really value

➡️ Simplicity, honesty, and stress-free event organization.

Step 4: Create a roadmap

• Strengthen the “transparency & simplicity” positioning.
• Actively collect reviews (Yelp, Google).
• Expand loyalty program.
• Emphasize turnkey service + free delivery.

Step 5: Build partnerships

Examples: local catering companies, sports clubs → strengthen tailgate & family packages.

Step 6: Engage the whole team

Every staff member must live the value of honest and simple service — from the first call to equipment pickup.

Step 7: Protect your strengths as you grow

Even if we expand beyond Wake County, the DNA of the company must remain: simplicity, transparency, and personal service.

Step 8: Outsource non-core activities

• Logistics overflow (rent vehicles in peak season).
• Accounting & payroll → outsource.
• Equipment cleaning → partially outsource to free resources.

🔍 Testing Against Kotler & Keller’s 3 Criteria

• Competitive advantage → Transparent pricing, turnkey service, and free delivery = trust + loyalty.
• Applicability → Works equally for backyard parties, tailgates, and corporate gatherings.
• Hard to copy → Big companies can mimic prices, but not the local trust, personal care, and flexibility of a family-run business.

👉 Party Rental Commany core competence = delivering a stress-free, honest, and personalized rental experience through transparent pricing, easy booking, and community-first service.

📈 Growth Opportunities

Why do we need to define core competence? Because it’s the foundation for finding growth opportunities through value.

Kotler’s “Holistic Marketing Structure” is a simple tool for this:

Customer focus	Core competencies	Partners
Value research	Discover explicit & hidden needs	Analyze what we do best
Value creation	Design new benefits & offers	Use core competencies to deliver
Value delivery	CRM, CX, service/support	Operations, logistics, IT, quality

This 3D view — clients, company, partners — ensures growth ideas are realistic and sustainable.