As I drove down the main street in a nearby town, I noticed more vacant storefronts than the last time I was passing through. Maybe, the owners selected bad locations to set up their stores? Or, perhaps, I’m witnessing the tangible consequences of the downturn in the economy. When the conditions don’t seem to let up, how can businesses survive?
Companies’ core competencies help them stay afloat and have long-term success in the face of competition and economic struggles. If a business has resources and skills to efficiently use those resources, it is already positioning itself for success. Next, a firm needs to analyze which capabilities can be used to create value for their customers. Will buyers compensate the business for them? Can profits be earned by taking advantage of the capabilities? Will competitors find it difficult to duplicate them? If the answer is yes, the business needs to focus on these core competencies.
Many times, companies try to do too much. They expand into new markets, introduce new products, and offer new services, but tend to do all of these things only marginally. They lose sight of their key strengths and instead operate a mediocre business with little or no differentiation from its rivals. If a company can exploit its core competencies and evaluate when and how they can be modernized to respond to external changes, it will surely maintain a competitive advantage in the marketplace both now and in the future.