CORE COMPETENCIES: Their Meaning, Examples, and Use in Business

core competencies
Image source: Anuor Aguilar

Every successful company has what it does better than others. That is why you can easily distinguish best-selling brands from others. This seeming advantage that a successful business has over others is what we call its core competencies. We will explain the concept of core competencies further in this article with appropriate examples. We’ll also learn how companies identify these core competencies with the SWOT analysis

What Are Core Competencies?

Core competencies are the resources and capabilities that compose a company’s strategic advantages. A current management theory contends that a company must establish, grow, and exploit its core capabilities to compete successfully.

Business Core Competencies

A company can choose to be operationally excellent in various ways. The following are examples of common core competencies found in business:

#1. High-Quality Products  

This core competency implies that the company’s products are the most durable, long-lasting, and dependable. The organization will most likely invest in the most stringent quality control procedures, technically skilled employees, and high-quality raw materials.

#2. Cutting-edge technology.

This core skill indicates that the company is an industry leader in its field. The corporation has most likely invested heavily in R&D, possesses numerous patents, and recruits professionals in their respective industries.

#3. Excellent customer service. 

This core competency ensures that clients have the best experience possible during (and after) their purchase. The corporation will have most certainly invested in employee training, a big number of customer support personnel and systems to deal with exceptions or concerns as they arise.

#4. Purchasing power. 

This core expertise makes use of a company’s economies of scale. This company has most likely invested in mergers or acquisitions and has developed good relationships with vendors to obtain preferential pricing or service.

#5. Strong corporate culture. 

This fundamental competency fosters the company’s internal atmosphere. By aggressively investing in employee appreciation, development, and collaborative, enjoyable events, the company hopes to recruit the best personnel.

#6. Quick production or delivery

This key competency denotes the company’s ability to manufacture or ship things quickly. The corporation will most certainly have invested in networked software systems, as well as production processes and distribution ties.

#7. Lowest Cost Provider 

This core competency implies that the company charges the lowest price for comparable goods. The corporation has most likely invested in the most efficient methods that minimize manpower or material input.

#8. The greatest degree of adaptability. 

This fundamental ability enables the corporation to respond rapidly to commercial opportunities or obstacles. The organization will most likely invest in cross-training personnel or agile software solutions.

Real-World Examples Of Core Competencies In Business

The three best examples of firms that have achieved long-term success by focusing on their core competencies are McDonald’s, Apple, and Walmart.


The ability to standardize its meal service and delivery operations is McDonald’s strongest core competency. After accounting for local tastes and exceptions, every McDonald’s offering tastes and looks precisely the same, regardless of geographical location or shop. Customers trust the brand because they always know what they will get when they order a Big Mac or Chicken McNuggets. McDonald’s success is still driven by trust.


Apple, with its iPhone, iMac, and iPad, has a unique capacity to design and manufacture electronic devices that appeal to people’ esthetic sensibilities and material goals. Each device has appealing visual esthetics and tactile appeal, which has allowed Apple to become the world’s most valuable firm in terms of current market value.


Even its closest competitors cannot match Walmart’s purchasing power. Because of its enormous supply chain operations, the company is able to acquire things in bulk at low prices and then undersell its competitors in order to attract and retain more customers.

How to Determine Your Company’s Core Competencies

Returning to the previously cited examples of corporate core competencies. You may recall that all of these examples involved huge corporations. If you own a small firm, don’t let this tendency prevent you from defining your key talents. Instead, follow these methods to discover your business’s core competencies:

#1. Critically your customers and clients

Is your company focused on a specific group of clients or type of business in your industry? Some IT graduates, for example, go on to work with pupils with special needs whose electronic educational resources must be customized to help them overcome learning obstacles. Working with customers with disabilities may be a key strength of a company with a good reputation for delivering these services.

#2. Examine your organization’s purpose statement.

Did you create your company to fill a gap none of your competitors have filled? Look at your mission statement to recall why and for whom you started your firm – offering that product or service to that client group is one of your core strengths.

#3. Meet with your team to discuss your main abilities.

Inquire with your staff about what they believe your company performs particularly well, both in comparison to competitors and in general. After that, compare their responses to yours. The overlap might help you identify your primary competencies. For example, if you own a restaurant and want to figure out how to stay in business as the industry struggles, sit down with your team and determine your most popular foods and cuisines, then write those down as prospective core competencies.

#4. Confirm that your core competencies are, in fact, core competencies.

Here’s a crucial thing to remember: Just because you find something your firm excels at doesn’t mean it’s a core competency. Let’s return to the restaurant example: what if other restaurants in your neighborhood are well-known for serving the same meals as your most popular items? In that instance, you may be unable to classify these meals as core skills because your competitors can plainly reproduce and sell them.

The problem with designating something as a core skill that is ultimately not one is that it may cause your business strategy to change toward focusing on a less profitable product or service.

#5. Outsource.

No corporation can do all of its tasks in-house. If you are having difficulty prioritizing the products and services that best define your firm, consider outsourcing other business needs so that you may focus on improving your core skills. Outsourcing your marketing efforts, for example, if your company’s primary skill is providing the highest-quality handcrafted furniture in your area, can offer you the time you need to design and manufacture the furniture properly.

#6. Put your key skills to the test.

Once you’ve identified your core competencies, focus your business strategy around them. If you find more clients coming to your business, especially if they’ve left your competition and come to you, you’ve most certainly recognized your key skills. If not, it’s back to the drawing board, and taking the time to figure out what distinguishes your firm from others is never bad.

Individual Core Competencies

To stand out from the crowd, a variant suggests that job seekers focus on their core competencies.

These excellent qualities can be cultivated and listed on a resume. Analytical ability, creative thinking, and problem-solving abilities are examples of personal core competencies. Individual or personal core talents provide a platform for an individual during interviews (i.e. a candidate can identify as the most experienced, creative, or technically sound candidate).

The core competencies listed on a resume should be targeted to the employer and demonstrate actual, highly proficient skills required for the role.

Examples of Personal Core Competencies 

Here are some common examples of personal core competencies:

  • Strategic thinking
  • Excellent organizational abilities
  • Personnel management and leadership
  • Project administration
  • Attention to the details.

Personal core competencies might also include highly specialized industry abilities. For example, if you work in information technology (IT), you may be proficient in specific computer languages or have extensive experience working with specific types of customers. That last example relates into an essential topic about defining core competencies: Looking at your coworkers might help you uncover your competitive advantages.

Why Are Core Competencies Important?

A company’s core capabilities enable it to understand better how to distribute its resources. For example, if a corporation does not want to turn particular jobs into company strengths, it may make sense to outsource those tasks. This includes clearer guidance on who to hire and what training to provide.

Core competencies also lessen the market risk for a corporation. A corporation can rely on being great or proficient in key areas to maintain consistency and reliability in operations. For example, companies with a strong internal culture will have lower staff turnover, training costs, product flaws owing to a lack of knowledge and disgruntled personnel.

Customers may recognize and associate a firm with its core competency when it determines what it is excellent at. As a result, core competencies assist a corporation in developing a better brand image or market presence. Many people, for example, connect Apple products with being the most cutting-edge and innovative.

Advantages and Disadvantages of Core Competencies


It is tough to mimic core competencies. Core competencies are sometimes developed over time (or with huge quantities of money). Once a company has developed a core competency, it frequently has a significant competitive edge in the market.

Core competencies may also be applicable across industries or product categories. Apple, for example, has moved into new product lines, other sectors, and different geographical regions based on its platform of being an exceptionally innovative firm. A company’s advantage could be generally applicable.

Finally, key competencies inherently improve a product’s marketability. Spirit Airlines’ fundamental ability to give the cheapest average flights is not just a strength but also a business motto. Though this may indicate that certain consumers are naturally hostile to the corporation, it also suggests that Spirit’s brand image is well-established and recognizable.


It may be just as difficult to change a core skill as it is to build one. This may lead the company’s brand image to falter and become unclear. McDonald’s, for example, was formerly famed for its indoor playgrounds and Ronald McDonald. Even though the company has moved away from this culture, long-term customers may still identify the brand with former key capabilities.

Core capabilities naturally limit a company’s flexibility. Consider a low-cost retailer like Wal-Mart. Because consumers may not correctly link the product with the brand, the company may struggle to create high-end, more expensive product lines with higher margins.

A business may “miss the forest for the trees” if it focuses too much on creating a core skill. The ultimate goal of a firm is to create revenue through the sale of products, not to possess core capabilities. As a result, businesses may expend enormous amounts of time or resources without a logical underlying strategy.

Identifying Your Company’s Core Competencies With The SWOT Analysis

The SWOT analysis can be used to assist you in establishing your company’s core competencies. Competencies are the talents and tasks you excel in and your customers’ value.

Your company may have several competencies, but its core competencies make it stand out from the competition.

Examining your company’s strengths is a good place to start when determining its core competencies. Once defined, core competencies can be the foundation of your business strategy.

Consider your core competencies to be your intangible assets. They are resources that you can utilize to outperform the competition, even though they do not show on your balance sheet.

Your core competencies will evolve, so a regular SWOT analysis is a good idea.

What Are The 6 Competencies of Leadership?

The 6 competencies of leadership are:

  • Integrity.
  • Values Diversity.
  • Accountability
  • Developing Others.
  • Vision
  • Commitment to Learning

What Are The 4 Basic Competencies?

The 4 basic competencies are

  • Unconscious incompetence.
  • Conscious incompetence.
  • Conscious competence.
  • Unconscious competence.

How Do You Write Competencies on A CV?

When writing your competencies on your CV, don’t just write anything; they should always be directly relevant to the position you’re seeking for. The primary purpose of this part is to get the recruiting manager’s attention.

In Conclusion,

One company’s advantages over its competitors are referred to as core competencies. It is the area of business in which the firm excels, and it is frequently what the company is renowned for. Core competencies define a company’s identity and influence its operational strategy, ranging from producing the highest quality products to providing the finest customer service to being the lowest-cost provider.\

Frequently Asked Questions

Why do core competencies matter?

Core competencies result in operational excellence, which results in improved products, happier customers, and more profitability.

What is the best type of core competency?

There’s no type of core competency better than the rest. That’s why companies should focus on and leverage their core competencies for optimal results.

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