Identifying core competences for diversification in a small UK manufacturing firm

This paper addresses a significant gap within the present body of work on the resource based perspective on the firm. That is the lack of empirical research on the resource based perspective within the SME sector (Mills and Platts, 2001). This study applies the resource based perspective and core competence analysis in particular in a very practical situation: a small manufacturing firm in the UK. The study is the result of a two year research project where the researcher was embedded within the firm as part of a DTI Knowledge Transfer Partnership (KTP) programme. The manufacturing firm supplies hydraulic tube assemblies to the yellow construction industry and has experienced rapid growth over the past ten years. Using a causal mapping methodology the findings reveal distinctive capabilities that the firm is able to use as a basis for diversification. The findings contribute to the body of literature on the resource based view of the firm by contributing to the debate on distinguishing between resources capabilities and core competencies and provide a methodological approach which helps to uncover core competencies in practice.