Marketing practice aims to build competitive advantage. To be successful and differentiate the business, needs to be built on clear capabilities. The analysis of those capabilities is a fundamental part of the marketing audit.
Try to look at the range of skills that the organisation possesses. Some businesses spend time talking about the ‘product’ but it is much more than that. Of course the ‘product’ needs to meet standards required by the target customer.
From here look more broadly at the transferable skills that lead to the development of the ‘product’. This could be based on service and delivery, quality, understanding of customer needs, brand, innovation. In many cases it is not one single thing that determines the capability. Usually it is a blend of a few aspects and often it is tissue paper thin. It is only when these capabilities are merged that the source of competitive advantage is developed.
Take O2 for example. They have a brand, a network but they work to understand the customer and develop new ways of delivering the customer experience. The acid test of any organisation is to ask why will anyone buy from me? That is where you can start to examine the source of competitive advantage and start to take the business forward