What does it take to build a sustainable competitive advantage for your company?

In today’s blog post, I will share how your company can stand out, get ahead and stay ahead of your competitors.

One way to create a long-term sustainable and successful company is to have something that customers uniquely value and that positions you as the go-to business.

Let´s begin to uncover your company´s core competencies.


  • ⇒ What are core competencies?
  • What are the advantages of focusing on core competencies?  
  • What is your company´s competitive advantage?
  • What are your company´s core competencies?
    • Step #1: What are your company´s strengths?
    • Step #2: What does your customer uniquely value about your company?
    • Step #3: What are the questions that will help you to identify your core competencies?
    • Step #4: How can you test your companies core competencies?
  • ⇒ Summary

What are core competencies?  

The idea of “core competencies” is one of the most important business ideas that has changed the business world. This is one of the key ideas that lies behind outsourcing. If your company concentrates their efforts on things they do well and outsource the rest, it will open up new exciting opportunities for your company.

What are the advantages of focusing on core competencies?  

Advantage #1: Gaining unique expertise

  • Your company can focus its efforts in areas that really matter to your customers and develop a unique level of expertise.

Advantage #2: Command a higher price

  • If your company focuses on your core competencies and continually work to build and reinforce them, the products will become more advanced than those of your competitors.
  • This unique level of expertise helps to command a higher price because customers are willing to pay more for better and higher quality products and services.

Advantage #3: Develop your unique skills

  • By building the unique skills and abilities you will lead your company to greater success.

What is your company´s competitive advantage?

  • Your company needs to have something that customers uniquely value.
  • This is why there’s such an emphasis on building an Unique Selling Points (USP´s) in business.
  • If you’re able to offer something uniquely good, customers will want to choose your products and will be willing to pay more for them.
  • C.K.Prahalad and Gary Hamel1 argue that “Core Competences” are some of the most important sources of uniqueness.
  • These are the things that a company can do uniquely well, and that no-one else can copy quickly enough to affect competition.

What is your company´s core competencies?

To determine your company´s core competencies follow these four steps to get started:

Step #1: What are your company´s strengths?

You need to recognize and capitalize on your company´s strengths. Consider the following questions:

  • What are 3 strengths that are unique to your company?
  • What would your customer say your company´s strengths are?
  • What does your company better than any other company?

Step #2: What do your customers uniquely value about your company?

  • Do they value your unique products and services?
  • Or is it the quality of your products and services?
  • Or is it your customer service?

Step #3: What are the questions that will help you to identify your core competencies?

Use the following questions and brainstorm:

Q 1: What are the factors that are important to your clients?

  • Identify the factors that influence people’s purchase decisions when they’re buying your products or services.
  • Make sure that you move beyond just product or service features and include all decision-making points.

Q 2: What are the competencies that lie behind them? 

  • If customers value small products, then the competence they value may be miniaturization.

Q 3: What are your existing competencies and the things your company does well?

  • Test your own competencies of relevance, difficulty of imitation, and breadth of application (see below step 4).
  • See if any of the competencies you’ve listed are core competencies or could develop as core competencies.

Q 4: What are the factors that are important to clients?

  • Review the list and check if you’ve identified core competencies that you already have. If so work on them and make them better.
  • If you have no core competencies, then look at ones that you could develop.

If any of these things do not contribute to a core competence, ask yourself if you can outsource them effectively.

If you’re working very hard, and you’re still finding it difficult to make a profit, then you need to think carefully about crafting a unique competitive position.This may involve developing core competencies that are relevant.

Step #4: What is the best way to test your companies core competencies?

Hamel and Prahalad provide three tests to see whether they are true core competencies:

Test #1 – Relevance

  • The company´s competence must give your customer something that strongly influences them to choose your product or service over others.
  • If it does not, then it has no effect on your competitive position and is not a core competence.

Test #2 – Difficulty of imitation

  • The core competence is difficult to imitate. This allows you to provide products that are better than those of your competition.
  • You’re continually working to improve these skills, so you can sustain your competitive position.

Test #3 – Breadth of application 

  • Your products and services will open up new potential markets.
  • If it only opens up a few small niche markets, then success in these markets will not be enough to sustain significant growth.


  • Key Point #1: The idea of “core competencies” has changed the business world.
  • Key Point #2: Focus your efforts on things you do well and outsource the rest.
  • Key Point #3: Test whether they are true core competencies or not.

Supporting you

I´m available to support you by re-imagine your business. The core competencies will help you to get clear on your strengths and what you can outsource. It will help you to build and sustain your competitive advantage in the marketplace.

Contact me for a complimentary 30-minute strategy session:


Coming up next month

In my next blog post, I´ll share how to use the USP Analysis.

Stay tuned!

1. C.K.Prahalad and Gary Hamel, “The Core Competence of the Corporation,” https://hbr.org/1990/05/the-core-competence-of-the-corporation

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