For a business, core competencies are its resources and capabilities that provide it with strategic advantages in the market. As per modern management theories, every business must define, develop, and make use of its core competencies in the right manner to ensure that it succeeds in the competitive scenario. To learn about how businesses do that, as well as core competencies examples, read on through to the end of the article.
In this article, you will learn about what core competencies are in the context of business. Apart from that, you will also understand the importance of core competencies for a business and how businesses work on them to ensure success. Furthermore, we will also take a look at some useful core competencies examples. Finally, we will share with you some tips to identify core competencies in business.
What Are Core Competencies?
According to Wall Street Mojo,
“The core competencies in business refer to its resources and unique fundamental capabilities that distinguish it from market competitors. It is an essential component of marketing strategy leading to brand recognition and business growth. The concept serves to be useful for companies focusing on multiple product lines and operating more than one business unit at a time.”
The core competencies of a business include its capital, human resources, and brand equity. These are also called distinctive competencies or core capabilities of a business since these are the factors that make a business unique in its own aspects. As per modern management theories, these factors consist of the business’s unique products, services, and processes that it offers.
However, there are other factors as well that enable a business to gain a competitive advantage. Some of them include innovation, brand advertising, quality control, etc. These factors enable the business to get a competitive advantage in the market.
Determining The Importance Of Core Competencies
According to Business News Daily,
“No two businesses are alike, but some are less alike than others. The more ways your company stands out from its competitors, the more likely your business is to attract customers. These distinguishing qualities are related to core competencies, and when you correctly identify and act upon these features, your business can thrive.”
Your business’s core competencies are its core products and the factors that provide it a competitive advantage. If you want to gain a competitive advantage, gaining full strength with your core competencies will be helpful to provide value to both your old and new customers. This can also help you strengthen the reputation of your company, grow your business, and retain your customers with new sales techniques and marketing efforts.
Essential Core Competencies Examples
The core competencies of a company are the strengths that make it thrive in the market. According to Investopedia,
“A core competency is a unique element that can not be easily replicated by other companies. Therefore, a company can identify its core competencies by thinking through how the company is different from other businesses. This includes differences in products, processes, market areas, delivery customs, pricing, or employee base.”
Hence, you will need to find your business’s core competencies. To understand what the core competencies of your business probably are, you will need to learn some examples. Here are a few examples of core competencies in business:
1. High-Quality Production
If a company does not compromise on the quality of products and services, there shall always be customers. Two major examples are Apple and Google. When it comes to hardware, software, and services, Apple does not compromise, despite being high-priced. On the other hand, Google’s quality of software systems and websites is incomparable. Focusing on creating high-quality products consistently will always work for any business.
2. Constant Innovation
Innovation is what keeps businesses on top for decades. You can take examples of various tech companies that constantly add new features and tools to their products that other platforms do not have. Furthermore, it also takes time for competitors to replicate the features. By the time they replicate, the innovating company comes out with something new, which enables the company to stay ahead always and gain a monopoly.
3. Top-End Marketing Strategies
There are plenty of department stores you have seen around you, no matter where you live, and these stores have an abundance of items from which you can choose what you want. However, there are some department stores that are more successful than others. These companies focus on marketing differently so that their products and services seem unique and assuring to their target customers.
4. Focus On Customer Service
One of the major reasons why Amazon is successful is its ability to provide excellent customer service than any other company. Since Amazon offers different types of products through its eCommerce platform and also outside the platform, the company plans to focus on customer service. This is the area where the company plans strategically, as it has become the company’s strength.
Ways To Identify Core Competencies
The following are a few things you can check with regard to a characteristic of your business and find out whether it is a core competency or not:
- The product, service, or initiative of the company benefits consumers.
- A certain practice of the company is rare and hard to replicate.
- A particular product is used in a variety of markets and also other products.
Hope the aforementioned core competencies examples are helpful for you in getting an idea of how they are important for businesses to gain a competitive advantage in the market. Basically, the core competencies of a business are the defining characteristics that make it stand out from its competition. Hence, it is essential for any business to identify its core competencies.
McDonald’s, Walmart, Apple, etc., are a few companies that focused on their core competencies to remain successful for decades. If you want to make a mark in the industry or you want to stay competitive in the market, you will need to find out and focus on the business’s core competencies. If you have anything more to add, consider using the comments section below.