To understand how important the concept of core competencies is you have to grasp what they are. Every business needs to establish its goals, what it wishes to appear adept at – these are the core competencies. Once they know how they wish to be viewed they focus their energies on establishing their reputation in that particular marketing niche.
With core competencies established, a company should be able to expand into other markets based upon the reputation it has built. In a way it is the ability of a successful business to barter on its good name that will allow it to move into new areas without necessarily having to hold in hand the capital to do so.
Let’s take a well known company, such as Apple. You could say that among its core competencies are:
- Easy to use computer systems
- Exceptional customer service
- Extensive choices in portable entertainment units
Those well known features translate in to a certain market appeal which ensures that each time Apple comes out with a new product then customers will flock to see it. As a case in point, the problems associated with the iPhone 4 didn’t stop people from purchasing and keeping the phones until the company worked out the issues.
A company which is unable to define its goals and objectives clearly will be unable to pursue them with focus. If investors are unsure about what a company has to offer they are less likely to invest. Tangible resources are an important asset for any business, but intangibles are equally vital.