The performance of any entity differs from that of another and does not rely on the differences between fields of businesses but specifically on differences between the owned resources and capabilities and on the way that these resources and capabilities are capitalized on to create core competence and competitive advantage (Andrei et al, p, 731).
Internal analysis will lead the entity to identify its resources and capabilities which are the core factors for creating core competence as a source of competitive advantage. Similarly it will help in identifying the entity’s strengths and weaknesses. When strengths and weaknesses are coupled with external opportunities/threats and a clear statement of mission, the basis for establishing objectives and strategies is laid down (David, 2015, p. 94).
Tangible resources, financial, organizational, physical and technological, and intangible resources, human, innovational and reputational, are mixed and bundled to create organizational capabilities (Hitt et al. 2012, p.79). In turn, capabilities used to carry out the entity required tasks to produce and distribute the goods or services provided to the customer which create value for them. When the entity combines harmonized resources and capabilities in a way that differentiates it from other competitors this result in the creation of a core competence. It distinguishes a company competitively and reflects its personality (Hitt et al, 2012, p.81).