Despite the influence and resources that large firms possess, small and medium size enterprises (SMEs) can find great success of their own when they find a niche with a sustainable competitive advantage. The literature has extensively discussed how SMEs can demand a price premium in a consumer segment based on focus differentiation. This paper explores how SMEs focus-based competitive advantage relies upon on competency-based factors that support their strategy. First, they have a non-scalable core competency that global firms cannot easily recreate due to their large size. Second, the emphasis for SMEs are on people or differentiation-based process core competencies, which also tend to be the most non-scalable. Third, SMEs find growth by shifting away from a niche to a differentiation strategy (if their core competency is scalable) or leveraging their non-scalable core competency to find a “string of opportunities” that are too small for large firms to notice separately, but taken together form a decent size business.