Core competency is a resource or capability that serves as a source of a firm’s competitive advantage over its rivals. It is a unique skill or capability that transcends products or markets, makes a significant contribution to the customer’s perceived benefit, and is difficult to imitate. Examples of core competencies include Sony’s competence in miniaturization and Dell’s competence in supply chain management. A firm’s core competencies determine where it creates the most value. In distinguishing its core competencies, a firm should identify the skills it has that are (1) unique, (2) valuable to customers, (3) difficult to imitate, and (4) transferable to new opportunities.
Definition