No Bad Questions About Business
Definition of Core competencies
What are core competencies?
Core competencies are the advantages a business can offer its customers over its competitors. They provide an answer to why one business is better than another. These may be products, services, skills, and abilities that define the company. A core competency can help a business remain relevant and competitive despite external changes. Many successful companies today are still around, thanks to the core competencies they defined, including Apple and McDonald's.
A core competency should:
- Be hard to repeat or mimic
- Be unique
- Provide exceptional benefits and value to customers
A business can identify its core competencies by researching its competitors, talking with its employees and customers, and reviewing its marketing messages and mission statement. However, this is not a one-time process, as any single core competency can become obsolete.
What are the main types of core competencies?
A business's core competencies may be its products and services or something that stands behind these features. For example, many companies produce smartphones, but a successful company will identify core competencies that set it apart from competitors. The same goes for fast-food hamburgers. What makes one business's food stand out? Here are some common core competencies:
- High quality
- Value
- Innovation
- Customer service
- Size and buying power
- Providing lowest cost
- Flexibility
- Company culture
Why do core competencies matter?
The key benefit of core competencies is that they allow a business to stay relevant and competitive by being a guide for a business's activities. Other benefits include:
- Optimize resources: Businesses with clear core competencies understand what tasks they want to focus on and which ones they don't need. This helps a business develop an efficient hiring process and allows it to outsource tasks that don't relate to its core competencies.
- Customer relations: Customers will value a business's core competencies and trust that company to provide them with great products and services.
- Better employee relations: Not only do core competencies provide guidance to a business, but they also give the business's employees a firm understanding of why their work is important. This facilitates loyalty, reduces turnover, and leads to efficient and innovative work.
It's never too early or too late for a business to develop its core competencies.
What are examples of a core competency?
Two excellent examples of businesses with core competencies that have succeeded around the world are McDonald's and Apple. McDonald's has standardized its food to look exactly the same anywhere one of its restaurants is located while also considering local tastes. Customers know what to expect when they order food from McDonald's, whether it's in their hometown or while on vacation. This keeps them coming back.
Apple has created products that match its customers' aesthetic and material desires. There's a status associated with an iPhone, Mac computer or laptop, and iPad. They are also reliable and offer innovative features. These core competencies make Apple popular around the globe.
Mad Devs' core competencies are transparency and accountability in all of our projects to provide software solutions for our clients that show our engagement in their problems and commitment to always finding a way to solve them.
Key Takeaways
- Core competencies are what set one business apart from its competitors.
- A business can identify its core competencies by researching competitors and talking to its customers and employees.
- Core competencies can be specific products or services or connected to them, such as customer service, quality, innovation, company culture, etc.
- Core competencies can also become outdated, so a business should take time to review them to keep them relevant.
- McDonald's and Apple are examples of companies that successfully identify and market their core competencies.
