Core competencies for diversifying: case study of a small business

This paper addresses a significant gap within the present body of work on the resource-based view of the firm: the lack of empirical research on the resource-based perspective within the SME sector (Newbert, 2007). This study applies the resource-based view and core competencies analysis in a very practical situation: a small manufacturing firm in the UK. The study is the result of a two-year ‘action research’ project where the researcher was embedded within the firm. he manufacturing firm supplies hydraulic tube assemblies to the yellow construction industry and has experienced rapid growth over the past 10 years. Using a causal mapping methodology the findings reveal distinctive capabilities that the firm is able to use as a basis for diversification into the leisure marine industry. The findings contribute to the body of literature on the resource-based view of the firm by providing a methodological approach which helps to uncover core competencies in practice.