A framework to identify the core-competency of a SME; Case of Lensbaby LLC

Businesses live and die in their ability to correctly invest in areas of competence that delivers value to their customers using the company´s unique capabilities, core competencies. There are very scant numbers of practical methods available in literature for determining the core-competencies in small medium enterprise (SME) level. The standard reported practices in the national and regional levels usually use the financial outputs, R&D investments and patent outputs as the main factors to quantify the technological capability in a specific industry or technology. At the firm level, either a benchmarking with the superior companies or a survey from customers shows the core-competencies of the firm respective to the competitors. This study proposes an innovative approach to develop a quantitative method based on customer acceptance (measured through financial outcomes of the products) to define the firm´s core-competencies. Method is an indigenous approach which doesn´t directly ask from neither customers nor employess/management about the company´s competencies. Instead based on rate of success among previous products launched to the market, and common characteristics of the successful products, core-competencies are defined. The proposed Framework uses the simple regression analysis and multivariable regression analysis to recognize the correlation between predictor variables and success variable. This framework has been performed in a small size engineering/manufacturing company and results have been provided. Advantages and limitation of the method will be discussed at the end.