| Definition |
A Core Competency is a special skill or technology that creates differentiable customer value. A companys unique capabilities are largely embodied in the collective knowledge of its people and the organisational procedures that shape the way employees interact. When appropriately applied, Core Competencies can create sustainable sources of competitive advantage over time through a series of investments in facilities, people and knowledge.
A Core Competency should:
- Provide significant value to customers and make a major contribution to the perceived customer benefits of the end product
- Be difficult for competitors to imitate or procure in the market, and thus create competitive barriers to entry
- Enable a company to access a wide variety of seemingly unrelated markets by combining skills and technologies across traditional business units.
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| Implementation |
Identifying and developing Core Competencies involves isolating key abilities within the organisation and then honing them into a definition of the organisations key strengths. Companies can compare themselves to others with the same skills to ensure they are developing truly unique capabilities. Companies can also develop an understanding of what capabilities their customers truly value. Investments should then be made to develop and sustain Core Competencies as new businesses are built and existing businesses refined. |
| Purpose |
Core Competencies capture the collective learning in an organisation. They can be used to:
- Create links across businesses and functional units
- Integrate streams of technology, the organisation of work and the delivery of value
- Encourage communication and involvement, and place a strong value on communicating across organisational boundaries
- Spawn new business development Opportunities
- Make decisions about which new technologies or capabilities must be acquired.
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