Business competency is a set of particular abilities and knowledge that sets a company apart from its competitors. Certain combinations of qualities and characteristics, often called core competencies, can allow a company to thrive in its market segment and greatly outpace its competitors in terms of earnings and customer satisfaction. In highly successful companies, core competencies have most likely developed in areas where they add the most value to products.
An insurance company has achieved a strong leadership position in providing insurance services to senior citizens. Management attributes its success to the fact that over the years it has concentrated on developing high-quality direct mail campaigns and well-trained, courteous call center personnel. It's a tradition in the company to provide a high level of personalized customer service.
A company has succeeded in securing a leadership position in the market segment for online grocery shopping. Several core competencies have caused customers to place a high value on their shopping experience with the online grocer. One competency is the design and execution of the supply system that links suppliers with the website. Another is the personalized shopping that results from the design and usability of the customer interface, resulting in a problem-free ordering and delivery experience.
A major company has long been recognized as a leading employer and popular place to work. For decades senior management has emphasized human resources management and has developed a core competency in assessing staffing needs based on organizational goals and budget realities. The company continues to succeed by providing opportunities for the development of existing staff and appropriately appraising and rewarding employees.
A software firm, for example, might have key advantages in the overall simplicity and usefulness of its programs and the high quality of its software code. A manufacturer of electronic equipment might develop a market advantage with the design of its circuits and components. Technology managers must be alert to industry innovation. Technology companies, like all businesses, develop competencies that change over time in response to changes in their business environments.