What is core business?

The concept of core business, in the business field, refers to the activity that has the capacity to generate value and that is essential to achieve a competitive advantage of great benefit for the company.

The translation of core business into Spanish could be distinctive competence, key competence, basic competence or line of business.

What are the key or core competencies?

The key competence or core business is specified through a study of the value chain, which allows determining the activities that are required to satisfy users, their costes and subsequent returns.

A distinctive competence does not focus solely on having the latest technology or particular production skills, since both factors can be acquired from third parties. What really prevails in the case of core business is the degree of knowledge and learning of the company to handle the available tools and technology, in addition to its ability to coordinate them.

The definition of each core business is essential for an organization to choose the outsourcing or outsourcing any of its activities, or opting for the implementation of improvements for specialization and excellence.

Examples of core competencies

Among the examples of core competencies, or core competent, we can highlight the case of a company that manufactures and sells clothing. At first glance, it would be logical to think that its core business is fashion, but deepening its strengths, it can be detected that it has better technological systems for cutting and dyeing fabrics compared to competition. Therefore, its distinctive competence would be the industrial area.

Two organizations that participate in the same sector are not required to have the same core business. Another example of core competition could be the differences between two car brands, one of them bets on aesthetics and design, while the other opts for cheaper prices.

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