The core competencies of a company are its defining capabilities and advantages. They can be used to differentiate it from other businesses. It is essential for enhancing a company’s competitive edge. It guides brand reputation, business growth, and marketing strategy.
Find out more about core competencies, and their benefits in business and personal life.
What are Core Competencies?
Core competencies are the unique, rare, and hard-to-replicate competitive advantage. C.K. introduced the idea of core competence in business as a resource-based strategy for corporate strategy. Prahalad & Gary Hamel. They describe core competencies in their 1990 book, “The Core Competences of the Corporation”, as fulfilling three universal conditions.
- They offer consumer benefits.
- It’s not easy for rivals to copy them.
- These can be used to create many products and markets. 1
This strict definition of core competence does not include the strengths of small businesses. However, most would not be capable of meeting the third condition. Core competencies can also apply to personal skills and work advantages. These personal core competencies could include:
- Problem-solving skills
- Analytical thinking
- Technical competence
- Conflict resolution
What Core Competencies Do
While core competence has changed over the last 30 years, it still relies on leveraging several competitive advantages. It is what makes it difficult for competitors to copy a product or service and make them more competitive. The core competencies of successful businesses include more than one:
- Customer service
- Size and purchasing power
Apple and Walmart are two examples of companies that have demonstrated the power of their core competencies. Walmart’s core competencies include its purchasing power and supply chain management. Walmart’s size allows them to purchase products in large quantities at lower prices than its competition. These low purchase prices allow them to undercut their competition and attract more customers.
Innovation is Apple’s core competency. Apple has a long history of developing innovative technology products such as the Mac computer, iPod, and iPhone. Apple is often the company that can take a product and engineer it in a unique way to make it a commercial success, even if it isn’t the first to do so.
Core Competencies: Advantages and Drawbacks
Core competencies are a key advantage for businesses. They can be more competitive over the long term. While it’s great to initially be successful with a product or service, if your competitors are able to duplicate it, you’ll eventually find yourself fighting for market share.
It’s becoming more difficult to stand out in a competitive job market. A section on core competencies can be a great way to use limited space in your resume to highlight the unique qualities that make you stand out.
Applicant tracking systems (ATS) are increasingly being used by employers to prescreen applicants. These scan resumes for keywords and then send them to the employer. The ATS software can identify keywords from the employer by including core competencies in your resume. This will help you to be more successful in the hiring process.
Problems can arise when a company assigns a core competency incorrectly to itself. This could lead to overemphasizing strengths or neglecting potential weaknesses. Imagine a company believing that marketing is its core competency, when in fact it is innovation. It may spend too much time creating marketing campaigns, but not enough on innovating products and services. This will make it less competitive over the long term.