A lot has been written about core competency in innumerable management books. But what does it really mean? Its only when companies understand the real meaning of core competency in today’s context, can they truly work on building a ‘differentiator’ that gives them an edge over others in the market.
A dynamic concept
The notion of core competency has evolved with changing times and market dynamics will continue to do so. For instance, in the times of Sony Walkman, the term ‘core competency’ was associated with deep technical innovation, and at other times,with just the sheer size of assets and deep pockets of a company, since they were crucial in the formation of a large conglomerate.
So what can be the core competency of an organization in today’s digital economy, where it only takes a handful of smart guys with minimal funds to bring the next disruptive innovation and consumers adopt it in millions, thanks to the internet?
Can it be the capability of your R&D labs and patents you own? Yes, in some sectors like pharma, patents go a long way in demonstrating a company’s prowess, but not in the industry a general. They can be used to protect the product and manage market leadership only until the next innovation comes around. At the same time, it is not the patent that can be your core competence, as customers buy products, NOT patents.