And so this is an internal approach.
This is an approach trying to help companies develop,
internally, core abilities to compete.
Core abilities to add value to customers.
And this model actually became quite popular in
the 1980s when a group of consultants and academics and
others reacted in some ways to Michael Porter's five forces approach.
And said, hey, there are successful companies even in unprofitable industries.
How do we explain that?
And what they did is they actually took one of Porter's depictions,
which is called the value chain and
used it to demonstrate how internal competitive advantage can be created.
So if you're starting your own business, pay close attention because what you want
to do according to this approach, is to try to find some uniqueness.
In fact, I would argue you pay attention to this even just in your own careers and
your own lives.
Because you need to find some core or unique ability that you have or
able to do better, more efficiently,
less expensively than your competitors and that add value.
[COUGH] What we'll do in the next part, is we'll look at this value chain and
try to understand a little bit more what we're talking about
in terms of core competencies.