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Why do Core Competencies Matter?

Simply put, core competencies are the unique capabilities that allow an organization to develop and sustain a competitive advantage.

The capabilities can be tangible, intangible or a combination of both. The organizations ability to create a sustainable and defendable position directly relates to the degree that the core competencies are unique, can apply to a broad spectrum of markets, can differentiate the company from the competitors, can provide a perceived value in the marketplace, and are not easily reproduced or emulated.

Core competencies can include specific skills, processes, technology or organization-wide behaviors. As you assess the core competencies of the firm, take special care to consider those competencies that may not at first be easily recognizable or perceived internally to carry value. Easy to work with, organized and efficient are internal core competencies that can translate to higher margins in the marketplace.

When combined with a unique product or service the organization has a defendable and sustainable competitive advantage. Although organizations many have many inherent capabilities, the most important capabilities are those that are aligned with market demands. An analysis of the firm’s capabilities juxtaposed with market demands is a crucial component of the strategic thinking process.

To this end once core competencies are identified, the market can be analyzed to determine if demand and core competencies are in absolute alignment or if modifications must be made. Often, modification if needed can be achieved by utilizing outside resources or changing the “selling message” and/or “product packaging” rather than any internal restructuring of work processes and output.

To learn more about Strategic Planning visit and look for the eBook titled, “Planning Your Company’s Growth A 10 Step Guide to the Strategic Planning Process”.

Lori educates and inspires entrepreneurs. Her company Business Simply Put provides information, advice and tools to succeed in business. Whether you are starting a company or growing an existing business, these tools will define your pathway to success. For more information visit or send an email to She loves to hear from inspired entrepreneurs!

Lori Williams
About the Author: Lori Williams

Lori Williams is a well-known business consultant, speaker and writer. She is the founder of which is an online resource for business information and advice. Business Simply Put offers eBooks, Financial Tools, Webinars and Videos designed for start-ups and small businesses. Lori is also an adjunct professor for Entrepreneurial Studies at the University of Southern California.

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