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Why Core Competencies Matter for Your Business

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You may have heard or read the phrase “core competency” lately and wondered if it's the latest example of meaningless corporate lingo, or at best another buzzword representing a basic concept that could be described much more simply. The answer is not exactly. Core competency actually holds significant importance for entrepreneurs and small-business owners.

The term first originated in a 1990 Harvard Business Review article by C.K. Prahalad and Gary Hamel titled “The Core Competence of the Corporation." The authors identify their titular concept as the “secret sauce” of business, enabling corporate growth, especially for an executive who can leverage that competency.

It’s a good idea to learn more about this critical business concept and then determine your company’s core competency for maximum gain, and here's an easy, three-step process to that end.

First, let’s establish a working definition. It’s important to understand that when we talk about core capabilities, we’re looking at the enterprise level, or the company as a whole. We're not discussing you as the business owner or any specific team members who might represent the business. So, the core competency of any business is a strategic, competitive........

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