Core Competencies: Examples And How To Discover And Use Them
Updated 1 October 2022
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Core competencies are the defining actions, abilities or characteristics that are unique to a person or a company. Since these competencies are not easy to replicate, they can give the person or the company a strategic advantage in the market. Learning what your key competencies are and how you can develop them can give you insight into how to improve your workplace or business practices. In this article, we discuss how core competencies work and how to use them for your workplace success.
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How To Identify And Use Your Company's Core Competencies?
You can use these steps to identify the core strengths of your company:
1. Consider what your customer find important
Take some time to think from a customer's perspective. Brainstorm what your customers look for when they buy products and services like yours and why they might do so. Make sure to think about every factor your customers use to make decisions, not just product features. If you have a strong understanding of what your clients value when seeking businesses like yours, you can determine which traits may be a part of your competencies.
For instance, the target customers of your garden fertiliser company might be home gardeners. Since they require nutrient-rich fertilisers to grow vegetables, fruits and flowers, your business core competency could be providing plant fertilising products with a high content of essential nutrients.
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2. Review your performance tools
Do some research to find out how your current and potential customers assess your business performance. You can read customer reviews, collect feedback from your business promotions and note public reactions to new offerings. You can also review the things that you do the best business-wise. By comparing these with the external feedback, you can discover if what you excel in aligns with what the customers want and deem important.
To give an example, consider that your company makes vegetable soup with a longstanding reputation for being delicious and satisfying in taste, with a home-cooked flavour. Based on this reputation, you can try to understand what you have been doing right. These would point you towards your key competencies, and you can use those to come up with ideas to improve your business.
3. Make a list of your competencies
List your skills and assess each of them according to their relevance to your business and your industry. Consider if they are hard for your competitors to copy and find out how applicable they are in a range of different markets. If your skills are relevant to your business, not easy to replicate, and have various market applications, you can count them as your key competencies. Once you have identified them, you can work on developing and building them further.
For example, your vegetable soup company may identify three competencies: the delicious taste of its soup, the health benefits of the soup and the fact that you offer home-cooked soup.
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4. Find out which competencies are relevant
While you may have several crucial skills, consider which of them are more relevant to your industry. Aside from being relatable to your industry, such skills are required to play a role in attracting your customers or clients. A relevant competency is required to offer your customers something that influences them to seek you out instead of the competition. If the competency you identify helps provide your product or service with this influencing power, it would help you succeed in the long term. The skills you outline are required to positively impact how you compete in your market to be considered a core competency.
For example, in the case of your vegetable soup company, your ability to offer fresh, home-cooked soup could be more relevant than your other competencies. People can buy other soups that are delicious and filled with nutrients, but your brand may be the only one that offers home-cooked soup.
5. Assess which competencies are hard to replicate
If your competitors find it challenging to mimic your competencies, you would be a unique brand in your industry, and there would be a growing demand for your products and services. To maintain your competitive edge it would be necessary to constantly improve on your skills and make sure that they remain hard to duplicate.
For example, to ensure that your vegetable soup company maintains its market lead, you would require to retain the flavour that appeals to customers and also introduce other flavours that they might like.
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6. Think about the wider applications of these competencies
A core competency is required to be able to contribute to expanding the market you appeal to. Ask yourself, “What demographics do this competency help me appeal to? How big are those demographics? How can this competency help me reach new markets?” It is great if your skill makes your business a major competitor in small markets, but you can use your competencies to expand your business to larger markets.
For example, even if the target customers of your vegetable soup company are vegetarians, you can find ways to make your product appealing to non-vegetarians. You might emphasise the nutrient-rich aspect of your soup that can provide essential health benefits. Shoppers who want to include more vegetables in their diet might take notice and decide to try your brand.
7. Structure your work around these competencies
After identifying and listing your main competencies, use them to reconsider how you structure your work and business relationships. For instance, you can review your daily routine to identify any everyday tasks that do not require using your main competencies. Going forward, you may want to outsource some of those tasks so that you can focus more on what you do best.
For example, you might decide to outsource the packaging design work for your vegetable soup company to a competent design agency. Since they specialise in designing, they are likely to a good job. More importantly, this would free up time that you can spend on developing your key competencies.
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What Are Examples Of Core Competencies?
The key competencies of a business generally vary by industry, but there are some common features across industries, such as:
High-quality products and services
You would have a competitive edge in the market if the quality of your products and services remains consistently high. People would start to associate quality with your brand, and it would become their go-to brand in that product or service niche. They would instinctively prefer it over what your competitors are offering.
Customers would prefer your brand if they feel that they are getting excellent value for their money. Even if your products and services are not in the affordable range, they are required to exceed customer expectations and offer great value to them. You are also required to make sure that your products are readily available and convenient to use.
Outstanding customer service
Having outstanding customer service is essential for most businesses in the Internet Age. Customers expect well-developed facilities for quick and easy purchases, payments, deliveries and returns. If they encounter any issues, they want quick responses and prompt solutions. By making customer satisfaction a crucial pillar of your business, you can keep your existing customers happy and gain new ones.
Successful marketing involves making your brand so visible and memorable that people would think of it first when considering products or services in your industry niche. Aside from touting the practical uses of your brand, it is essential to make it something that everyone ought to aspire for. For that purpose, in your marketing campaigns, use eye-catching fonts, colours and designs that lend to immediate brand recognition.
Continual innovation is the key to long-term business success. By making innovation a part of your business strategy, you can improve your existing products and services and bring new ones to meet consumer demands. That would enable you to stay at the top in your industry and make your products and services more appealing.
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What Are The 12 Core Competencies?
The 12 core personal competencies are:
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What Are The Advantages And Disadvantages Of Core Competencies?
Understanding the advantages and disadvantages of core competencies can help you decide when and how to use them. Core competencies are hard to replicate. Identifying and using them effectively can help you to stay ahead of the competition in your industry. These competencies also enhance the marketability of your products and services, and offer great benefits to customers. But, your existing competencies may hinder the ability of your business to adapt to new market demands. If your brand identity and competencies are intertwined, it might be hard to innovate.
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