Core Competencies


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.


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BREAKING DOWN '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.

  1. Body Of Knowledge - BOK

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

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  3. Value Proposition

    A business or marketing statement that summarizes why a consumer ...
  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. Economic Moat

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