Core competence is what your business is really great at.
Extending the magic.
Business usually fail without a ‘core competence,’ or something they’re really great at. A successful restaurant, for example, will often have one signature dish or cuisine that people absolutely rave about, or have an awesomely fun dining room, or offer low prices for enormous quantities.
The same is true for people: a top competitive runner is probably really great at one particular event, whether it be the 100m sprint or some much longer distance.
But in business and life, having one ‘core competence’ isn’t always enough to keep growing and winning.
That’s why many businesses do something called ‘core and explore.’ They keep doing what they’re already great at (the core), while trying to find (explore) and other, related areas to also be great at.
A car company known for its sporty sedans, for example, might try making equally sporty SUVs and pickup trucks. Or perhaps a bakery, famous for making delicious fluffy muffins, might try to expand with delicious fluffy scones or bagels.
This “core and explore” strategy doesn’t always work, because it’s hard to develop (and maintain) more than one core competence. Sometimes being great at muffins and great at bagels are two very different things.
Businesses always want to grow. Those who succeed do so by figuring out what they’re really great at (core competence) and how to apply that magic to more of what customers want.