Core business

The core business of an organization is an idealized construct intended to express that organization's "main" or "essential" activity.

The corporate trend in the mid-20th Century of acquiring new enterprises and forming conglomerates enabled corporations to reduce costs funds and similar investment vehicles, and sometimes the following of a popular trend among corporate management seeking to appear current and impress investors.

Core business process means that a firm's success depends not only on how well each department performs its work, but also on how well the company manage to coordinate departmental activities to conduct the core business process, which is;

1. The market-sensing process Meaning all activities in gathering marketing intelligence and acting on the information.

2. The new-offering realization process Covering all activities in research, development and launching new quality offerings quickly and within budget.

3. The customer acquisition process all the activities defining the target market and prospecting for new customers

4. The customer relationship management process all the activities covering building deeper understanding, relationships and offerings to individual customers.

5. The fulfillment management process all the activities in receiving and approving orders, shipping out on time and collecting payment.

To be successful, a firm needs to look for competitive advantages beyond its own operations. The firm needs to look at the competitiveness value chain of suppliers, distributors and customers. Many companies today have partnered with specific suppliers and distributors to create a superior value delivery network.

References

Kotler & Keller, Marketing management, 2009, p76

See also

Core competency