What: is Core Competency?

Core competencies are the most significant value creating skills within your
corporation and key areas of expertise which are distinctive to your company and
critical to the company's long term growth. Your company's core competencies
are the things that you can do better than your competitors in the critical, central
areas of your company where the most value is added to your products. These
areas of expertise may be in any area from product development to employee
dedication.
"A core competency is an area of specialized expertise that is the result of
harmonizing complex streams of technology and work activity." ~ C.K.Prahalad
A competence which is central to your business's operations but which is not
exceptional in some way should not be considered as a core competence, as it
will not generate a differentiated advantage over rival businesses. It follows
from the concept of Core Competencies that resources that are standardized or
easily available will not enable a business to achieve a competitive
advantage over rivals.4

Core Competence vs. Sustainable Competitive Advantage

If a core competence yields a long term advantage to the company, it is said to

be a sustainable competitive advantage.

Defining Your Core Competences

Three Main Characteristics

1. They should make a disproportional contribution to stakeholder value

2. They should open doors to other opportunities
3. They should represent such a unique blend of tacit and explicit
knowledge that it cannot be copied by competitors

What Does the Core Competence Achieve?

1. Enables the creation of new products and services that provide potential
access to a wide variety of markets.

2. Makes a significant contribution to the customer value and enables a

business to deliver a fundamental customer benefits
the perceived customer benefits of the end product.

3. Helps create sustainable competitive advantage as it is competitively

unique and difficult for competitors to imitate.
Creating Sustainable Profits: 9 Questions To Answer

Individual Competencies vs. Core Competencies

Individual competencies stand alone and are generally considered in

isolation. >>>

Core competencies are harmonized, intentional constructions. They are

more than the traits of individuals. Capabilities are considered core if
they differentiate a company strategically. Core competencies are
aggregates of capabilities, where synergy is created that
has sustainable value and broad applicability. That synergy needs to be
sustained in the face of potential competition and must not be specific to
one product or market.

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