Core competencies define the main strengths and characteristics of a company that gives it a competitive advantage. Core competencies can include technical capabilities or enhanced knowledge that allow businesses to get ahead of others.

These characteristics also enable companies to expand to new markets and increase their chances of survival. In this blog post, we’ll be discussing what core competencies are and how companies can benefit from them.

What is core competency?

The concept was first introduced by Gary Hamel and C.K. Prahalad in an article published in the Harvard Business Review. The authors described core competencies as multiple skills that distinguish a firm from other companies.

In order to develop core competencies, companies must first filter out their best abilities. Once that’s done, they can start honing these characteristics into organization wise strengths for better results. Keep in mind, these abilities ought to be unique and must provide value to customers.

For instance, the presence of experienced managers and veteran leaders with several years of experience in the industry. In short, your competency must contribute to vision, goals and philosophies that will strengthen the foundation of the company. However, to achieve this kind of success, business owners must first be able to accurately identify core competencies that’ll match the company’s industry.

Core Competency Examples

To help you get a better idea, let’s talk about some of the most popular brands and their core competencies.


Let’s take Honda for example. Its core competencies include powertrains and superior engines. These competencies have propelled Honda into becoming one of the most renowned automobile companies in the world.


To set itself apart from competitors, Nestlé utilizes a unique strategy that gives its company an edge over others. Its core products often exhibit exceptional quality in terms of both hygiene and health, contributing to increased customer satisfaction.


Google’s core competencies comprise of scalable hardware infrastructure and high-end software engineering. The company’s amazing office culture and thirst for innovation can also be considered as a core competence.

Some of Google’s core products such as its mapping platform and indexing technology can also be considered as notable competencies.

Advantages of Core Competency

As far as advantages are concerned, highlight core competencies allow companies to concentrate on products and areas of business that can give high returns. This kind of insight provides executives and managers the direction needed to improve the business environment.

Additionally, the idea of core competencies encourages companies to experiment with new ideas and become more innovative. This increases diversity and enables corporations to reach their full potential.

Disadvantages of Core Competency

Problems may arise when a company inaccurately assigns a particular product or “strength” as a core competency. This can particularly be troublesome if you’re busy focusing on positive points that don’t even exist.

If such a situation occurs, your company would undoubtedly be wasting time on ideas that could have been utilized to leverage a strength. Another major drawback is that the concept of core competency may prevent a company from trying to do better.

For instance, relying too heavily on a certain advantage can lead to problems in the future. Especially because the market is likely to evolve with new trends. To prevent lack of sustainability, companies must focus on long-term avenues such as building a strong company culture, featuring patented products and entrusting exclusive product rights.

Core Vs Distinctive Competencies

Now, if you’re a part of the industry then you’ve certainly heard of the term ‘distinctive competency’ before. If not, it’s basically a type of core competency that’s more distinct and exclusive in nature. Because of this, distinctive competencies offer companies a competitive edge in the industry, making it difficult for others to copy or imitate their strategies.

Wrapping it up

Core competencies can also comprise of intangible resources that are difficult to imitate or acquire by competitors. Hopefully, this detailed blog post has helped you learn more about core competencies. Do you have something to add? Tell us about it in the comment section below!


Write A Comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.