No two businesses are alike, but some are less alike than others. The more ways your company stands out from its competitors, the more likely your business is to attract customers. These distinguishing qualities are related to core competencies, and when you correctly identify and act upon these features, your business can thrive.
Core competencies are the defining products, services, skills and capabilities that give a business advantages over its competitors. In other words, business core competencies are advantages that no competitor can reasonably offer or replicate.
Identifying your company’s core competencies – including its core products and most compelling competitive advantages – is an essential business strategy for proving your value to new and longtime customers. When you know your business’s core competencies, you can strengthen your company’s reputation, keep current customers, and grow your business with new sales and marketing efforts.
You may be wondering about your business’s core competencies. If you can’t immediately identify any, that’s OK. Core competencies can also be skills and abilities.
Some typical core competencies include the following:
To explain further, let’s look at an example of a leader in each of these core competencies.
While these examples name massive companies, even small businesses can identify core competencies.
To make customer support part of your core competency set, learn to provide customer service like a luxury brand by monitoring customer feedback, tracking customer service metrics and researching your target audience.
Entrepreneurs and small business owners should also understand personal core competencies. For example, whenever you search for new employees, you assess each prospective applicant’s personal core competencies. Every in-demand career skill someone lists on their résumé is a personal core competency.
Chances are good that when you identify a job applicant with personal core competencies matching your organizational goals, you’ll move them to the top of the list to prioritize hiring for a cultural fit.
Here are some examples of common personal core competencies:
Personal core competencies can also involve highly industry-specific skills. For instance, if you work in information technology (IT), you may have IT management skills or excel at certain computer languages. You may even have unique experience working with specific customer types.
You don’t have to be a massive corporation to identify strong core competencies. Small businesses can determine where they shine by following these steps:
Does your business cater to a specific group of customers or serve a niche market within your industry? For example, some people with IT degrees go on to work with students with special needs whose electronic educational materials must be modified to lessen learning challenges. A core competency of a company with a strong reputation for providing these services might be a special focus on working with clients with disabilities.
Did you launch your company to address a gap none of your competitors have filled? Look at your mission statement to remember why and for whom you launched your business. One of your core competencies is providing that product or service to that client base.
Conduct employee surveys asking what they think your company does especially well – in general and compared to the competition. Then, take their answers and compare them with yours. The overlap can point you to your core competencies. For example, if you run a restaurant and want to figure out how to survive as the industry struggles, meet with your team to identify your most sought-after meals and cuisines, and then jot those down as your potential core competencies.
Here’s an essential point to keep in mind: Just because you identify something your company does especially well doesn’t necessarily make it a core competency. Let’s use the restaurant example again: What if other restaurants in your area are also beloved for serving the same meals as your most popular items? In that case, you might not be able to qualify these meals as core competencies because, clearly, your competitors can replicate and offer them.
The problem with falsely labeling something a core competency is that you might shift your business strategy toward focusing on a less profitable product or service.
No company can fulfill all of its necessary tasks in-house. If you find yourself struggling to prioritize the products and services that best distinguish your company, consider outsourcing other business needs so you can focus on making your core competencies the best they can be. For example, if your business’s core competency is selling the highest-quality handcrafted furniture in your area, outsourcing marketing and PR can give you the time you need to properly design and make the furniture.
Once you’ve determined your core competencies, pivot your business strategy to focus on them. If you notice more customers coming to your business – especially if they’ve left your competitors and turned to you – then chances are you’ve likely identified your core competencies. If not, it’s back to the drawing board – and taking the time to determine what distinguishes your business from others is never a bad thing.
Knowing your business core competencies gives you a robust base from which to shape your operations, marketing, outsourcing and other critical company needs. Or, if you’re currently seeking work, your personal core competencies can help you narrow down potential opportunities and stand out among potential employers. Just as in the fitness world, when your core is strong, the rest of you (or your business) gains strength too.