Core Competency

For Marketing Learners Globally

 

Core Competency

Anything that a firm can do well at is called a core competency. Hamel and Prahalad (1990) suggested that a core competency should meet the following three criteria.

1. customers should benefit.
2. competitors should find it difficult to imitate
3. the core competance can be transferred to many products and markets.

A core compentancy can be a number of things one company has over another.

It can be a skill or expertise the organisation has. For example Dyson are good at innovation, Microsoft is good at software development. The firm can then use this core competancy to gain a competitive advantage over it competitors. That is the key point. Whichever aspect of the organisation adds value to it and gives it a competitive advantage, you can call your core competancy.

British supermarket retailer Tesco understand their customers very well through the use of the clubcard reward scheme, the way the analyse and then implement the findings of their data helps make them a market leader. You can then argue Tecos’s market research department is one of their core compentancies because they take the information and adapt their services to the local market place, thus adding value to the customer experience.

As suggested a core compentency needs to be unique, but also the firm needs to continually develop the core compentency if they want to stay ahead of their competitors.

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