FOR BRANDS to be successful, it is important that they identify their core competencies in order to create a more effective brand and be a leader in the industry that they represent. Core competency is an area of specialization that a company excels in. It can take the form of a product, skills or services and is normally what customers identify your company with. Defining the core competency is the core essence of a brand. Brands that do not define their core competencies may find that they are all lumped together and will be swimming against the tide in their move to establish their market share.
Companies that have their core competencies mapped out have a clear brand identity and command market share. For example, Perodua’s core competency is in the manufacturing of small compact cars. By focusing on this, its models such as the Kancil and Myvi have been well received. Should Perodua shifts its focus to the bigger models, it will move away from its core competency and may face an uphill battle in terms of having to compete with the bigger marquees of the more established brands.
Similarly, McDonald’s excels in its burgers and fries and quick service concept. If it will to include noodles or pasta in its menu and move on to a dining concept, it will move away from its brand identity and confuse the customers.
Brands that excel in their core competencies are those that live up to their brand promises. A McDonald’s burger taste the same and is of the same size in any outlet and in any country. Consistency in quality helps to build the consumers’ trust in the brand and provides an assuring brand experience.
There is a tendency for brands to move out of their core areas of business and venture into other areas as part of its diversification plan. Brands need to stay focus and build on their core competency before moving into new areas of business.
(Article from The BrandLaureate)