A Core Competency is a well-organized skillset, technologies, processes, knowledge, abilities, products and services that enable business to deliver unique value to customers. Your customers or clients view them as unique, challenging, and difficult to imitate. Identifying and developing your core competency would enable you to forge a strong reputation for your business, and is a key to sustaining your long-term competitive advantage. If your competitors have equivalent expertise, products or services that your business offers, you have no core competence. Remember, in life, there is no joy in doing just what every other person is doing. You have to be different.
Your business must focus its energy on developing core competency by creating a roadmap that sets goals for competence building. This set you apart from other companies. It’s your top secret to success. They are what you will ever need to meet ever-changing market demands in an intense global competition
‘’ Our goals as we progress in life should be to do very well whatever it is we are doing. If I am picking up garbage, I want to be the best garbage collector in the world. If I am designing an integrated circuits, I want to be the best at that…. Learn as much as you can but set your aspirations to being really good at what you do and not always , but most of the time, the progression would take care of itself.’’–George Fisher, Motorola Chairman
Your business core competency can be deplored to the development of new and innovative products, services and markets. Most businesses have more than one core competency. While some businesses may have many core competencies, a business must be exceptional in a particular category for it to be considered a core competency. Let’s take a look at some companies and the way they have evolved using their core competencies.
Apple’s core competency is her innovative expertise in superior design, hardware integration and superior products. Apple creates products with maximum perfection that customers have not thought about but would change their lives. Apple’s core competency enable her to do things many times better not just a little bit better. Think of how the iPod replaced the Walkman, iPhone killed Blackberry and the iPad replaced the Palm Pilot
One of Wall-Mart’s core competencies is its massive information system. Wal-Mart quickly grasped the importance of harnessing information technology in order to cut cost and create a genuine competitive advantage. As early as 1983, according to Jeffrey A. Krames in his book, What The Best CEO Knows, Wal-Mart pioneered the application of new systems, including the use of satellite technology that enable the company to get incredible amount of data flowing between stores, warehouses and home office in Arkansas. In late 1980s Wal-Mart had 135,000-square-foot building constructed just to house Wal-Mart’s sophisticated computer system. By 1992, the company had spent $700million on its information systems making it one of the largest systems in the world (second only to Pentagon). The huge flow of data help the company to work more closely with suppliers and manufacturers as well as in managing their inventory.
Elon Musk founded SpaceX to disrupt the space industry by offering low-cost access to space. SpaceX charges about $61.2 million to launch a telecommunications satellite to orbit, which results in $4,653 per kilogram of satellite, while other company charges between $15,000 and $40,000 per kilogram. Low-cost access to space is the primary value proposition SpaceX promised its customers, and the company has been highly effective at organizing its operations around this mission making it difficult for other companies to compete on cost with SpaceX .
SpaceX is unique among US space contractors in its high degree of vertical integration. The company develops and manufactures in-house about 75% of its major products. SpaceX is the primary actor in all phases of product lifecycle, including vehicle design/engineering, component manufacturing, software development, subsystem assembly, vehicle integration, vehicle testing, launch operations, and on orbit operations. SpaceX’s vertical integration is a critical factor in its low costs. While other space industry had to rely on four different players to launch a satellite to orbit: the satellite manufacturer, a launch operations provider, the rocket manufacturer, and the supplier of engines for the rocket. SpaceX has already integrated three of these four roles. This vertically integrated supply chain allows SpaceX to have huge control of costs.
SpaceX’s most significant core competency has been in lowering the launch costs that have limited many space activities. While making several modifications to the fuel and engines, SpaceX’s major breakthroughs have come through recovering and reusing as much of the rocket and launch vehicle as possible.
Google’s core competency is the ability to obtain an enormous amount of data about its customers. The company continually gathers users’ information, buying habits, and other related information. All this information does give Google a critical competitive advantage. It enables Google to offer its customers You-tube video, ads that serve their needs best. As a result, Google has become a strong, popular, and easily recognizable brand worldwide.
Michael Dell, the founder of Dell computer started his company by building computers to suit customer’s requests. The entire business, from design to manufacturing to sales was oriented around listening to the customer, responding to the customer, and delivering what the customer wanted. Dell’s direct model of ‘mass customization’ was forged through a bottom-up strategy based on customers’ needs and preferences. Dell says while other companies guess what their customers want, his company knows. Through thousands of calls, emails from customers, the company gets vital information about features and capabilities they are looking for in a computer. It is one of Dell’s core competencies
So in order to be successful, your business must have core competencies. It sets you apart from other businesses. Kindly let’s have your thought about this and remember to like and share
By Olusegun Solaogun
CEO: Firstway Bookshop