Core Competencies

AAA

DEFINITION of 'Core Competencies'

The main strengths or strategic advantages of a business. Core competencies are the combination of pooled knowledge and technical capacities that allow a business to be competitive in the marketplace. Theoretically, a core competency should allow a company to expand into new end markets as well as provide a significant benefit to customers. It should also be hard for competitors to replicate.

INVESTOPEDIA EXPLAINS 'Core Competencies'

A business just starting out will try to first identify - and then focus on - its core competencies, allowing it to establish a footprint while gaining a solid reputation and brand recognition. Using, and later leveraging, core competencies usually provides the best chance for a company's continued growth and survival, as these factors are what differentiate the company from competitors.

The term "core competency" is relatively new. It originated in a 1990 Harvard Business Review article. In it, the authors suggest that business functions not enhanced by core competencies should be outsourced if economically feasible.

RELATED TERMS
  1. Body Of Knowledge - BOK

    The core teachings, skills and research in a field or industry. ...
  2. Gap Analysis

    1) The process through which a company compares its actual performance ...
  3. Economic Moat

    The competitive advantage that one company has over other companies ...
  4. Outsourcing

    A practice used by different companies to reduce costs by transferring ...
  5. Brand Awareness

    The likelihood that consumers recognize the existence and availability ...
  6. Value Proposition

    A business or marketing statement that summarizes why a consumer ...
Related Articles
  1. Globalization: Progress Or Profiteering?
    Economics

    Globalization: Progress Or Profiteering?

  2. Getting To Know Business Models
    Entrepreneurship

    Getting To Know Business Models

  3. Share The Wealth With Franchises
    Personal Finance

    Share The Wealth With Franchises

  4. The Uptick Rule Debate
    Active Trading Fundamentals

    The Uptick Rule Debate

comments powered by Disqus
Hot Definitions
  1. Takeover

    A corporate action where an acquiring company makes a bid for an acquiree. If the target company is publicly traded, the ...
  2. Harvest Strategy

    A strategy in which investment in a particular line of business is reduced or eliminated because the revenue brought in by ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  5. Pareto Principle

    A principle, named after economist Vilfredo Pareto, that specifies an unequal relationship between inputs and outputs. The ...
  6. Budget Deficit

    A status of financial health in which expenditures exceed revenue. The term "budget deficit" is most commonly used to refer ...
Trading Center