Core competencies are the top unique abilities of your company when it comes to products and services, which helps in giving the company a competitive advantage in the market. These include your company’s resources and capabilities, which help to provide your business with a strategic advantage, and need to be cultivated to succeed against the competition that prevails in the marketplace.
In this article, you will first have a general idea of what core competencies mean in business. In addition, we shall also discuss what constitutes a business’ core competency and the major aspects. Then, we will give you some regular examples of core competencies in business. Finally, you will learn how to find out the core competencies of your business. Hence, read on to learn more about the topic.
What Are Core Competencies?
According to Business News Daily,
“Core competencies are the defining products, services, skills and capabilities that give a business advantages over its competitors. In other words, business core competencies are advantages that no competitor can reasonably offer or replicate.”
If you have a better idea of the core competencies of your business and also the core products, your business will be in a position of competitive advantage. You can find them as a part of your essential business strategy to prove your value to your new as well as longtime customers.
Once you get to know the core competencies of a company, you will be able to strengthen the reputation of your business and grow it in the market while ensuring that you get to keep your current customers. You can develop new sales and marketing efforts to grow your business.
Major Aspects Of Core Competencies
Each competency of your business is a positive characteristic that can help the company uniquely position itself in the market. If you make proper use of your core competencies and have proper knowledge of them, you can make it difficult for your market competitors to duplicate the offerings of your company and replicate the success. This will give you a rightful competitive edge.
According to Tech Target,
“Which core competencies matter most varies by industry. A company’s ability to stand out in those competencies, and ideally uniquely combine them with other competencies, can give it competitive advantage over its industry peers.”
Hence, it is important for your company to have a good idea of the industry, as well as the market demands.
For a business activity to become a core competency, it needs to satisfy one of the below-mentioned conditions:
- The customers must consider it to be of superior value as compared to similar products in the market.
- The product, service, or business activity must be able to provide access to a wide variety of markets.
- It will be difficult for another company to imitate or replicate the business activity.
Typical Examples Of Core Competencies In Business
The following are some of the best examples of core competencies in business:
- Offering high-quality products or services on a consistent basis (Example: Google).
- It must be able to provide customers with the topmost value when it comes to similar services in the industry (Example: Dropbox)
- Continuous innovation in the marketplace, making it always stay ahead of competitors (Example: QuickBooks).
- Having a monopoly over the market with great buying power and a formidable size (Example: McDonald’s).
- Amazing customer service, which makes a customer feel valued (Example: Amazon and Walmart).
A Few Ways To Identify Core Competencies In Business
As per the recommendations of Investopedia,
“A successful business has identified what it can do better than anyone else, and why. Its core competencies are the “why.” Core competencies are also known as core capabilities or distinctive competencies. Core competencies lead to competitive advantages.”
Hence, it is extremely important for a business to find out its core competencies.
The following are the major ways through which you can find out the core competencies of your business:
1. Getting A Better Idea Of Your Clients And Customers
You will need to think twice before offering a product or service as to whether you want to serve a specific niche of customers or serve a niche market. Focusing on a particular business activity and strengthening it will help the business to get a better reputation.
2. Stick To Your Company’s Mission
Many companies forget their mission statement as they start serving the needs and demands of their customers and start to make profits. You must remember your mission statement and recall why you launched your business and for whom your business activity is focused.
3. Find Out The Core Competencies By Discussing With The Team
Conducting employee surveys in these cases can help a lot. Asking your team how they feel about what part the company does well will give you a great idea of your company’s core competencies.
4. Ensure All Your Core Competencies Are Valid
Just because you think that your company does something well does not mean it is your core competency. If you label something else as a core competency, you will shift your business strategy towards a product or service that is less profitable.
5. Outsource Tasks That Do Not Fall Under Core Competencies
It is hard for a small company to fulfill all its necessary tasks within the company. If you think that there is a certain business activity that is not your core competency, you must consider outsourcing it for better results.
You can see from this article that core competencies are the factors that define a business and makes it stand out from the competition in the market. It is important for a business, especially new ones, to identify and exploit its core competencies in the process of establishing the company.
If you want to find the core competencies of your business, you will need to find them within the work processes of the company and have inside-out information about what goes on. What can you add among the ways to find a core competency of a business? Share your ideas in the comments box below.
A passionate writer and an avid reader, Soumava is academically inclined and loves writing on topics requiring deep research. Having 3+ years of experience, Soumava also loves writing blogs in other domains, including digital marketing, business, technology, travel, and sports.