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Core Competency


Anything that a firm can do well is called a core competency. Hamel and Prahalad (1990) suggested that a core competency should meet the following three criteria:

  1. Customers should benefit
  2. Competitors should find it difficult to imitate
  3. The core competence can be transferred to many products and markets.

Core Competency Examples

A core competency can be anything that a firm does better than its competitors which helps it gain a competitive advantage. It can be a skill or expertise that the organisation has. For example Microsoft is good at software development and Dyson are good at innovation. In February 2014 Dyson announced that they will be investing five million pounds in a laboratory working on domestic robots and robotic vacuum cleaners. For more information click on this link https://www.bbc.co.uk

Tesco Clubcard Reward Scheme

British supermarket retailer Tesco understands its customers very well through the use of its Clubcard reward scheme. Tesco will record each Clubcard customers purchases and analyses the information about each customer to plan its marketing activities for

  1. that customer
  2. customers of that type and
  3. customers in general.

The manner in which Tesco analyses and implements Clubcard data findings contributes to its success as a market leader. You can argue Tescos’s market research department is one of its core competencies because it is an expert in its fields and knows how to use it to add value to the customer experience.


A core competency needs to be unique, but also the firm needs to continually develop the core competency if they want to stay ahead of their competitors.


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