A business just starting out will try to first identify - and then focus on - its core competencies, allowing it to establish a footprint while gaining a solid reputation and brand recognition. Using, and later leveraging, core competencies usually provides the best chance for a company's continued growth and survival, as these factors are what differentiate the company from competitors.
The term "core competency" is relatively new. It originated in a 1990 Harvard Business Review article. In it, the authors suggest that business functions not enhanced by core competencies should be outsourced if economically feasible.