"The corporation, like a tree, grows from its roots. Core products are nourished by competencies and engender business units, whose fruit are end products." Core competencies are the roots of the tree, feeding the trunk of core products, which branches out into business units, and fruit into end products. If there's a disconnect between the roots and the rest of the tree, the tree will never bear fruit and will eventually die.

For this reason, companies must organize around their core competencies to enhance competitiveness - to bear the most fruit. To do this, the organization must identify what their core competencies are, and ensure that they meet three basic requirements.

They provide potential access to a variety of markets.

They contribute to the customer benefits of the product.

(Apr 1992). Harvard Business Review, 70(2). Retrieved November 2, 2007, from Business Source Complete.
Prahalad, C. & Hamel, G. (May/Jun 1990). The core competence of the corporation. Harvard Business Review, 68(3). Retrieved November 2, 2007, from Business Source Complete.

Vargas, M. (2004). What are core competencies? November 2, 2007, at http://retailindustry.about.com/library/terms/c/bld_competencies.htm.

Core Competencies