The strategic thinking process requires managers to assess their business' strengths and weaknesses, the result of which lead to an identification of core competencies. These in turn are used to respond to the opportunities and threats found in the external environment. Only by understanding internal capacities and the external environment can the successful manager analyze the strategic positioning options available to the business. Choosing a strategic position of either cost leadership or differentiation based on this analysis provides the manager with a fundamental direction for the business that can shape its ability to create value for its customers. In addition to these issues this paper provides specific criteria for core competencies and examples of value plate implementation.