By: Santi Chacon
(Chief 'Business Guru')
Core Capability: is a specific area in a business that is central to the way it delivers value to the consumer. Examples of a these type of aptitudes can be the infrastructure or technologies centered on customer service, marketing, sales, management, logistics, manufacturing etc...
Executives need to learn to be profitable (see entry on Profitability Versus Profits) before they pursue the monetization of its' unique strengths. Organizations in the social media and technology industries exemplify such inadequacies. Many of these corporations are dependent on investors to survive and would fail if funding stopped. Business leaders that can't produce a profitable business model are incapable of discovering core capabilities; this is the wasteful story of throwing shit against the wall to see what sticks.
Rolls Royce
Companies such as Rolls Royce exemplify what may occur when a company focuses on its strengths. Under the leadership of Sir John Reese the business sold off its' car subsidiaries and moved out of the car business and focused it resources on designing, manufacturing, and providing maintenance on its' aircraft engines. Executives then increased revenues by over 500% and are now number two in their industry.
Factors that will assist a company in industry leadership are found in the executives ability to learn to identify relevance, difficulties with imitation, and market potential in its own infrastructure.
Relevance: the factor must strongly influence and be relevant to your consumers.
Difficulty of Imitation: the core competence should be difficult to imitate.
Market Potential: this strength should be something that opens up a good number of potential markets.
What are Yours?
Core Competencies are what make your organization unique.
Core Competencies are sources of competitive advantages.
Core Competencies are the building blocks to future opportunities and earned income ventures.
As you develop your business over time key capabilities will develop. These organizational skills and talent may not be evident in the beginning and may be different from your core products. Evaluate what customers are demanding or enjoying, in which is or could easily be profitable.
What factors that are important to your clients?
What does your business do well that is related to the value you are now delivering to your consumers?
What are the organization’s area of specialization and/or expertise?
What complex streams of business activity across the organization’s value chain does it do well?
What intangible strengths does the organization possess that brings it success in the market?
Is the competency applicable to a wide variety of markets?
Does the competency enable the organization to develop new products and services which deliver fundamental benefits to customers?
Does the competency make a significant contribution to the perceived benefits of end products / services?
Is the competency unique and difficult to imitate by competitors?
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