The Correct Way to Define The Core Competence of a Corporation


An organization’s core competency is its strength and a way that provides a platform on which its businesses can grow. It also refers to the strength through which organizations can seize all opportunities that come their way and be able to deliver value to customers. Core competencies of an organization are unique to it and, therefore, cannot be replicated by a competitor easily; whether it is an existing entity or a new one in the market.


It is quite common for companies to have more than one core competency. Core competencies, as we all know, are also referred to as distinctive competencies or core capabilities. These abilities help companies create and maintain a sustained competitive advantage for them in the marketplace. The idea of identifying and cultivating core competencies to build competitive advantage and growth holds good for companies operating in all sectors.


The core competence of the corporation defined in the correct way!

To define core competencies in a right way, many authors consider it to be a collective learning of a company. The learning will not just deal with coordinating diverse production skills but also bringing together different streams of technology. In this regard, core competencies are not just about harmonizing various technologies, but it will also reflect work ethics and delivery of value to customers.


To understand core competencies in a better way, we can consider the example of Honda, the automobile maker. The company’s core competencies have always been its power trains and engines. It is these competencies that have enabled it to lead the market in motorcycles, cars, generator, and law mover businesses.


According to market experts, core competencies have three distinct characteristics – should be really difficult for competitors to imitate, bring about a significant contribution to the benefits of the end customer, and should provide the access to a wide variety of markets.


There is another way to have the core competency of the corporation defined. In this definition, core competence is directly related to a deep commitment, involvement, and communication to working at all levels of an organization. This way, it will involve various functions and people at all levels.


For any organization to achieve long-term success and growth, it is important for them to identify their core competencies and make investments in them. The organizations need to focus on diverting resources for creating and maintaining all the skills that help in developing competencies. If your company, for example, is trying to develop its core competencies then it first needs to isolate these skills from others. Once this step is complete, they need to be developed systematically to help the company gain a competitive advantage and be able to deliver more value to customers.


There are management experts that believe that areas that fall beyond the core competencies of an organization should be outsourced. What this will do is enable the organization to focus and invest more on core competencies. Also, to have the core competence of the corporation defined perfectly, the organization can use them to guide its management priorities and strategic visions.