78 CHAPTER 4 KNOW YOURSELF
Include a table listing your products or services, describing them briefly and indicating
the relative importance of each one. Relative importance is best illustrated by contri-
bution to net profit. For example, if you earn the same gross sales revenue from selling
computer hardware and software, but you make twice as much profit on the software,
then the software contributes twice as much to the bottom line.
Try to make your description less abstract by including a simple picture or diagram.
This is less important if the product is well known and probably unnecessary for a plan
that is not going outside your well-run organisation. It is critical if you have a new prod-
uct. You can illustrate services by being creative. A picture of a meeting might serve to
illustrate the services of an accountant. This might seem unnecessary, but it is surprising
how much a picture helps. Trust me.
Core competencies
You should by now have identified your core competencies – those areas where your
business has specific expertise. As already indicated, these competencies reflect the
aggregate of the experiences gained and the skills developed when handling specific
challenges and opportunities. They may also be derived from investment in particular
resources, including facilities, machinery and equipment. I prefer to define them loosely.
An alternative approach is to list competencies and assets separately.
This is a good point at which to indicate the unique factors relating to your products
and services. Examples include the following.
If you manufacture, explain your competitive advantage. We have one of the two
looms in the world capable of producing cloth in this width. The capital cost of a
new machine at … creates a significant barrier to entry … which tends to prevent
competitors from moving into … .
You almost certainly have more than one product or service. Indeed, this
is almost essential if you are looking for start-up funding. Venture capital
providers are very jumpy about a business with just one line. They have
this curious notion that the business will fold and they will wave goodbye to their
money if the demand for this single product or service dries up. You know of course
that you can expand or modify your lines and that, anyway, you can ‘create’ many
different products by market segmentation (discussed in Chapter 5).
You have to spell this out clearly. Unfortunately the problem is that as soon as you
show a range of goods and services, the nice people with money start fretting that
you might be losing focus. The middle course is to specify your products judiciously.
CORE COMPETENCIES 79
If you are in the fortunate position of owning some intellectual property, shout
about it. We own the world wide patent/design rights for …
If you buy from a supplier, try to show how you have exclusive rights or some
special relationship with the supplier. Under the terms of our exclusive licence to
resell this technology in Italy, the supplier cannot appoint further resellers without …
If you own a trademark or servicemark, explain the benefits. We were first in
this market and were able to establish ownership of the trade name which is now
recognised as the leading brand … We have further protected our rights by registering
this trademark in the following jurisdictions …
Inspection of your value ladder and the strengths section of your SWOT will help you
identify your core competencies. Some areas where you might find them are listed in the
box below. The list is brief and generic. You should be able to identify much more spe-
cific skills and competencies. For example, your company might be good at bringing new
products to market rapidly, miniaturising electronic components, managing takeovers
and acquisitions, selling to government purchasers or hospitals, and so on.
Identify your competencies honestly, and try to rank them in order of value to you. You
will want to bring these out in the written plan. For the moment, keep the details to hand
for review in Chapters 5 and 6.
Fifteen areas where you might nd competencies
1 R&D capability.
2 Product development.
3 Management of supplies/suppliers.
4 Production.
5 Capacity management.
6 Inventory control.
7 Branding.
8 Management of channels-to-market.
9 Market research/understanding.
10 Sales techniques/account management.
11 Information management.
12 Negotiating.
13 Corporate acquisitions.
14 International operations.
15 Specific areas of management expertise.
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