Definition of the word core competency

The term "core competency" originated in the 1990s as a business strategy concept to help companies identify and focus on their most essential capabilities. In his seminal work, "The Origin of Strategies," C.K. Prahalad and Gary Hamel introduced this term to describe the necessary and competitive skills, knowledge, and resources that a company must possess in order to succeed in its industry. The core competency serves as a unique and sustainable competitive advantage that allows a company to outperform its rivals and provide value to customers. By concentrating on their core competencies, businesses can achieve operational efficiency, reduce costs, and allocate resources effectively to drive growth and profitability. In summary, the term "core competency" emerged as a strategic paradigm in the context of globalization and intense competition, aiming to help organizations prioritize their essential capabilities to achieve a sustainable competitive edge.