Core Competency: Why It Matters
Walking through one of the larger tradeshows in our industry is an interesting experience. It's fun to see the plethora of new products, many quite clever, which work their way into suppliers' product offerings. Like the retail industry, new products keep us fresh while giving our customers new things to get excited about and new reasons to purchase promotional products.
Having said this however, we must be careful when selecting where we purchase these products. Many items are sourced at Chinese tradeshows such as the Canton Fair with little research done regarding the factory that is providing the products. I have weekly conversations with both suppliers and distributors that reinforce the phrase "caveat emptor," which is Latin for "let the buyer beware." This has never been more prevalent in our industry as suppliers expand their product offerings into categories that are outside of their strengths or core competencies.
In Wikipedia's definition of core competency, one of the sentences hit a nerve: "Core competencies are particular strengths relative to other organizations in the industry which provide the fundamental basis for the provision of added value." Wow! How much does this NOT apply to our industry?
As you walk from booth after booth on the tradeshow floor, it becomes apparent that multiple suppliers are purchasing identical or very similar products-often from the same factories. With multiple product categories being offered by numerous suppliers, how can you tell which supplier is really good? How can you tell what their core competencies are? Is the supplier's only core competency its ability to decorate the product? Any why does it matter?
In our industry, I believe there are two fundamental ways that suppliers grow their businesses. First, they can work very hard to acquire new customers that will purchase their existing product lines. Or second, they can add new product categories to their lines so they can sell more types of products to their existing customers. Most companies try to do both, but adding more product categories appears to be the path of choice.