Why do you need to identify core competency? Why is it important?
We often hear advice that we should focus on marketing what is unique about us. Checking into twitter, I see endless attempts to shout “we are different!” But is that enough? Do customers really care that we are different? Or is it that they are looking for a particular value?
It is true that in business strategy, we must identify our Unique Value Proposition (UVP) in relation to our competitors and/or substitute products. But to do this effectively, we need to clearly understand:
- What customers really need, want and value (target)
- What unique combination of skills and resources do we have, and how can we use them to meet that target (our strategy)
What IS core competency?
Business strategy experts Prahalad and Hamel developed the model of core competencies, noting that they can create significant competitive advantage. While a company may have many competencies (things they are very good at and/or different), a core competency must pass 3 tests:
- It must offer significant benefit to customers
- It must be difficult to replicate
- It can be reused in different products, services and markets
Once you identify core competency, it creates a point of focus. It helps guide your decision making. And you can start thinking about how to leverage it more.
So how do we identify our own core competency?
First, start with making a list of your competencies. At this point, be very broad in your investigation. For example, you may have some internal processes that you are very good at, but customers don’t really notice. It is still a competency.
Next, you need information on what your customers need, want and value. Start with your existing customers. What feedback have you heard from customers? How could your products and services better meet their needs?
Now consider how you might be able to use your competencies to create products and services that your customers value. Maybe you can leverage your efficient internal processes to create a greater variety of products? Or add on a new service?
The final test is for uniqueness. How easily and quickly could your competitors copy what you do? You need to consider WHY this competency exists in your company. Is it because you have people with specialized knowledge? Or a patent on unique technology? We can sometimes be too quick to assume that our competitors can’t copy us. And then we are blindsided when our customers are swayed away by a “better” offer from competitors.
It takes time and effort to identify core competency
Sometimes, we jump too quickly for the obvious. It can be tempting to look for a quick fix. Or be swayed by what others in your industry are doing.
So before you spend a lot of time and money on flashy ads and promotions to make you look different, take some time to analyze the true unique value that you can provide to your customers. Ask yourself, how does this difference make my customers life better? And do I really have the unique skills and resources to do this for the long term?
Sometimes you need an outside perspective to get an objective assessment of your competencies. Perhaps you can ask your customers? Your employees? Suppliers? The main point is to get many perspectives to give you a clearer picture.
Learn more about how we support learning and development for managers and leaders
Our online learning system provides the convenience of working at your own pace & location with the support of an instructor – always just an email away. Visit our website to learn about our range of services.
Start learning now with a FREE mini course!
Try out our learning system for yourself with our mini course on Strategic Communication