Strategic Capability and Core Competencies

Figure 1: Core Competencies

The assets and skills that make up a company’s competitive advantages are its core competencies. According to a contemporary management philosophy, a company must identify, develop, and capitalize on its core strengths in order to outperform the competition. (Twin, 2022)

A prosperous company has determined what it can do better than its competitors and why. The “why” is its fundamental competences, which are also referred to as core capabilities or distinguishing competencies. Competitive advantages result from core capabilities.

The 1990 Harvard Business Review article “The Core Competence of the Corporation” is when the relatively new management concept of core competency first appeared. The author, C.K. Three prerequisites are discussed by Prahalad and Gary Hamel for a business activity to qualify as a core competency:

• The activity must provide superior value or benefits to the consumer.
• It should be difficult for a competitor to replicate or imitate it.
• It should be rare.

Source: Twin, A. (2022, October 13). Core competencies in business: Finding a competitive advantage. Investopedia. Retrieved November 23, 2022, from https://www.investopedia.com/terms/c/core_competencies.asp#:~:text=Core%20competencies%20are%20the%20resources,to%20succeed%20against%20the%20competition