Core Competency

A company's core competency are things that a firm can do well and that meet the following three conditions specified by Hamel and Prahalad (1990). 1. It provides customer benefits, 2. It is hard for competitors to imitate, and 3. it can be leveraged widely to many products and markets. A core competency can take various forms, including technical/subject matter know how, a reliable process, and/or close relationships with customers and suppliers (Mascarenhas et al. 1998). It may also include product development or culture such as employee dedication. Modern business theories suggest that most activities that are not part of a company's core competency should be outsourced.

If a core competency yields a long term advantage to the company, it is said to be a sustainable competitive advantage.

Notes:
Gary Hamel and C. K. Prahalad, (1990) "The Core Competence of the Corporation", Harvard Business Review, vol. 68, no. 3, May-June 1990, pp 79-93.
Mascarenhas, B., Baveja, A., and Jamil, M. (1998) "Dynamics of Core Competencies in Leading Multinational Companies", California Management Review, vol. 40, no. 4, pp. 117-132.