The firms listed below have different core competencies. All are clear leaders in their industries, although all also have strong rivals.

In the first part of this exercise, you will research one of the firms, identifying its competencies.You will then evaluate those competencies vis-à-vis its rivals. Finally, you will suggest ways in which these competitive advantages could be lost.

Part One—In Groups Listed below are four firms that have a clear and sustained competitive advantage in their industries. Behind these advantages are core competencies, and that is what you want to first identify.

Using online sources, analysts’ reports from brokerage houses, or other tools such as the Value Line Investment Survey, identify the core competencies of the firm you have been assigned. Remember that core competences are a special type of capability, so it is something that a firm does particularly well compared to its rivals.

Outcomes of competencies such as market share, reputation, brand, low cost, and the like follow from and are sustained by core competencies. Thus, these are not the core competencies you are looking for.

• Dell Inc.

• Home Depot

• Starbucks

• Tiffany’s

• Wal-Mart Part Two—In Groups Evaluate each of the core competencies you have identified in Part One for your firm using the criteria of valuable, rare, imperfectly imitable, and nonsubstitutable. Remember, if any of these four criteria are not met, then the firm’s ability to sustain competitive advantage through this core competence is not present. Be sure that you can defend your selections with respect to each of the four criteria. If you exclude one of the competencies you selected, be able to explain why you changed your mind. Be careful that you apply the concepts correctly by referring back to the material in the text as needed.

Part Three—In Groups For the core competencies that you retained after completing Part Two of this exercise, identify what the firm has to do in order to sustain these core competencies over time. Put another way, what could the firm do or not do that would lead to the erosion and eventual loss of the competitive advantage that each of those core competencies drives?

Part Four—Whole Class Each group will present its analysis to the class and the rationale behind its conclusions.