Core Business

Core Business  is the core business of the company. It is the main activity, in which the company specializes and in which it must focus its efforts, from a strategic point of view.

Normally, the main business is the activity with the greatest weight among those carried out, that is, with the highest participation in sales. It can also be the original operation, at the time of its founding, in organizations that have expanded their reach over time.

The success or failure of a corporation can be associated with an understanding of its core business. Staying focused on the area of ​​expertise is the most common strategy, avoiding over-expanding activities. An alternative to grow without distancing yourself from the main business is outsourcing, the outsourcing of activities that are not central to the company.

Core business examples

Core Business Natura

Natura’s core business is the development of cosmetics, perfumes and personal care products using corporate social responsibility strategies. Being sustainable is not only Natura’s mission, but it is in its core business because it is what sets it apart from the competition.

Core Business Coca-Cola

For Coca-Cola, its core business is the production, sale and marketing of some of the world’s most beloved beverages. By including the term “most loved” in the core business, the company already indicates paths for its business. This is essential to carry out the strategy in the whole company and mainly in the three approaches: production, sales and marketing, areas in which Coca-Cola works hard to exert excellence.

McDonald’s Core Business

McDonald’s has the main business of offering good food to consumers, in a short time and at low prices, always maintaining the McDonald’s brand culture.

How to identify the main business?

Strategically, the entrepreneur can think of the following questions to identify the core business of his company:

  • What attracts the most customers to the company?
  • Who are the main consumers?
  • What does the company do better than the competition?
  • What innovations does the company bring to the market?
  • What are the best-selling services / products?
  • What is the most profitable area?
  • Who’s who in charge of the business and why are those people there?

Difference between core business and core competence

Another concept that helps in managing the core business is the core competence, which can be translated as the core competence of the company. It represents that function that the organization performs with excellence, such as the use of technologies, for example.

What distinguishes it from the core business is that  it  is  not about commercial activity, it is unique competencies that become strategic for the business. There are three indicators of core competence: how difficult it is to reproduce the competence; how many markets can be accessed with this feature; and how much it contributes to the final product.