Have you ever heard of the term core business? If you’re related to the business industry, your answer will probably be “Yes, of course!”. But, do you know what core business means, or what the core business of the company you work for or own is? We’ll help you answer these questions by the end of the article.
When talking about the core business, we’re referring to the purpose of the company. Meaning, what is its main activity? What added value makes that company different from any other? Even the reason why the firm started in the first place is an important question. All of this encompasses the meaning of core business – the company’s purpose in life.
Identifying the core business will make the company understand just what its value in the market is, what’s the strategy to be applied and the technologies to be used to make users prefer it over the competitors. To make this happen, it’s necessary to apply a core process in which certain tasks must be executed sequentially to reach the objectives set by the business.
Is it important to define the core business of a company? How can I do so?
There are several management platforms in the market that can help manage a company’s core business. For example, at WillDom we’ve created Wave, a software that allows firms to streamline the company’s processes.
By using these types of platforms, the idea is not to lose sight of what the goal is, nor how the workflow is being carried out to achieve that objective.
Depending on the industry a company belongs to, the core business will be different. It’s crucial to have this clear at the outset because this set of functions and competencies is what will give the newly founded company the added value it needs. For example:
- Real estate: a real estate firm is focused on selling property and helping buyers find a new residence
- Hotel chains: the core business of a hotel chain is the revenue, marketing, management, and customer service within the hotels.
The core business is not only focused on the product or service offered, but also related to how the company generates value to that product or service. What does it offer to the users so that they prefer it over the competition?
Also, depending on the product and the industry, the core business may be related to innovation, price, or how user-friendly it is.
Defining the core business of a company from the beginning is crucial. As an example, doing this in a detailed way will help the company have more opportunities to be more assertive when looking for clients. Furthermore, defining the core business helps to understand what the company’s goals are, and what are the people, processes, investments, and business decisions to be made in order to meet those stated goals.
If you don’t know where to start, the best way to define it is to ask yourself a few questions in order to help identify what the core business is. Among them, we can find:
What am I trying to sell and to whom?
Again, it’s important to clarify that this will always depend on the industry to which the company belongs.
In many cases, it isn’t just about the product itself, but also about the whole experience.
In addition, knowing who we want to target is also essential because it’s easier to define the product and how it’s going to be sold. It will also help state the brand’s voice and tone.
Being sure about our target audience will guarantee greater assertiveness when it comes to investing money in digital advertising, as one example.
What added value do I give customers over the competition?
Doing some research is necessary before defining the core business. Understanding what products we have in hand and which ones already exist in the market will help to understand what makes our company unique and great.
Benchmarking is a technique that helps understand how other companies execute a specific service or produce a certain product, so that we can then see how ours might be enhanced to make it more competitive. What value can we give to the users? Is it the experience? The price? The quality?
What is core competence business?
Related to what we have just stated, core competencies are those that distinguish a company from others that exist and offer similar products or services. Identifying this core competency is interesting since it will lead to the development of new products or services, as well as to the expansion into new markets.
In short, defining the core competencies of your company will be what will make it endure over time, and will make it adaptable to the changes required by the market. Any company that wants to be recognized and keep selling as it did on the first day must understand that business strategies should always be refined. This is the only way to prevail in the face of constant changes in technology and market needs.