Core Competencies

Loading the player...

What are 'Core Competencies'

Core competencies are 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.

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.

RELATED TERMS
  1. Core Competency

    A narrowly defined field or task at which a company excels. A ...
  2. Core Plus

    A fixed-income investment management style that permits managers ...
  3. Core Earnings

    The revenue derived from a company's main or principal business, ...
  4. Core Liquidity

    Cash and other financial assets that banks possess that can easily ...
  5. Body Of Knowledge - BOK

    The core teachings, skills and research in a field or industry. ...
  6. Core Inflation

    A measure of inflation that excludes certain items that face ...
Related Articles
  1. Professionals

    What are Core Competencies?

    Core competencies are the essence of what a company does well. A business uses its core competencies to make and develop products, goods and services according to its company mission. Core competencies ...
  2. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  3. Stock Analysis

    This One-Of-A-Kind Energy Stock Could Double

    Frequently, the best road to success for a company is to do one thing really well -- preferably something nobody else does but that's in great demand all the same. #-ad_banner-#This is exactly ...
  4. Entrepreneurship

    Every Business Needs To Answer These 5 Questions

    Although there are endless ways to reframe and rephrase them, there are only really five important questions that every business needs to answer.
  5. Stock Analysis

    Will Core Labs Get Much Cheaper?

    Core Labs is as close to cheap as this high-quality service provider usually gets
  6. Stock Analysis

    Google's 5 Key Financial Ratios (GOOG)

    Learn how calculating financial ratios such as the debt-to-equity ratio and price-to-earnings ratio helps investors evaluate Google's core business.
  7. Economics

    How Can Companies Increase Market Share?

    Companies that increase their market share enjoy a competitive advantage. They receive better prices from suppliers, and they’re able to produce goods faster.
  8. Analyzing Apple's Threat of New Entrants (AAPL)

    Understanding the competitive forces within an industry can be as simple as looking at five factors. There is the rivalry within the industry itself, but there is also a collective power a company’s ...
  9. Entrepreneurship

    In Small Business, Success Is Spelled With 5 "C"s

    Incorporating these steps will help your business thrive in a competitive market.
  10. Mutual Funds & ETFs

    The 5 Cheapest iShares ETFs to Date in 2016 (ITOT, IVV)

    Learn about BlackRock's iShares family of exchange-traded funds and discover which of the company's ETFs carry the lowest expense ratios.
RELATED FAQS
  1. At what levels are core competencies required for businesses operating in the primary ...

    Learn about how core competencies are used in business and how they help primary and secondary sector businesses when used ... Read Answer >>
  2. When is outsourcing a bad alternative to vertical integration?

    There are many things to examine when considering outsourcing versus vertical integration. One reason to not outsource is ... Read Answer >>
  3. What do you need to know to create a business model?

    Learn what a business model is, its importance and the primary elements that are needed in order to create a successful business ... Read Answer >>
  4. What is an economic moat?

    The term economic moat, coined and popularized by Warren Buffett, refers to a business' ability to maintain competitive advantages ... Read Answer >>
  5. Is there a benefit to outsourcing internationally over outsourcing within the country?

    Understand the benefits of outsourcing internationally and locally for business. Learn why many businesses choose to outsource ... Read Answer >>
  6. How do companies balance labor supply and demand in human resources planning?

    Find out what it means for a company to balance labor supply and demand, and learn how human resources planning can strategically ... Read Answer >>
Hot Definitions
  1. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  2. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  3. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
  4. Over-The-Counter - OTC

    Over-The-Counter (or OTC) is a security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, ...
  5. Quarter - Q1, Q2, Q3, Q4

    A three-month period on a financial calendar that acts as a basis for the reporting of earnings and the paying of dividends.
  6. Weighted Average Cost Of Capital - WACC

    Weighted average cost of capital (WACC) is a calculation of a firm's cost of capital in which each category of capital is ...
Trading Center