Core Competencies

What you're really good at. LeBron James might be a pretty good golfer, or an excellent card player, or a fine actor. But his core competency is basketball.

For companies, you can think of this as their main product. Google Earth might be cool. You might be excited about riding around in a Google self-driving car some day. Google glasses might seem a little dumb, but, hey, you have to admit that it would be nice to watch Sportscenter while walking to work/school.

But Google's core competency is search. That's how it got its start. That's where it makes most of its money. That's where they really whoop the competition, like LeBron on the basketball court.

The formal theory about core competency was developed by a couple of management experts named C. K. Prahalad and Gary Hamel, originally laid out in an article published in 1990. They argued that having a core competency allowed companies to compete better, compared to a strategy of spreading resources out more thinly and attempting to be equally good in a number of different areas.