THE CORE OF YOUR BUSINESS: WHY IT’S IMPORTANT

The Core of Your Business: Why It’s Important

The significance of identifying and focusing on the core of one’s business. It explains how a deep understanding of the core can help a business stay focused, create a unique value proposition, and differentiate itself from competitors.

In the book “Rework,” authors Jason Fried and David Heinemeier Hansson emphasize the importance of focusing on the core of your business. They argue that businesses often get distracted by peripheral tasks and fail to focus on what truly matters.

The core of your business can be thought of as the central idea around which all other aspects of your business revolve. It’s the essential, underlying concept that makes your business unique and valuable. It’s what sets you apart from your competitors and drives your success.

Focusing on the core of your business means saying “no” to peripheral tasks and opportunities that don’t contribute to the core of your business. It means constantly evaluating and reevaluating your business to ensure that you’re staying true to your core.

In this chapter, we’ll explore why it’s so important to focus on the core of your business. We’ll look at examples of businesses, both Indian and international, that have successfully focused on their core, as well as those that have lost sight of it. We’ll also provide practical tips for identifying and staying true to the core of your business.

Sanil: So, Vikas, tell me about your new business idea.

Vikas:Well, I was thinking about starting a new restaurant.

Sanai Okay, but what’s going to make your restaurant unique and stand out from the competition?

Vikas: Hmm, I hadn’t thought about that. I just want to make good food.

Sanil: That’s a good start, but you need to figure out what your core idea is. For example, have you thought about specializing in a particular type of cuisine or focusing on sustainable and locally sourced ingredients?

Vikas: I see what you mean. I could focus on Indian street food with a modern twist, and use organic and locally sourced ingredients.

Sanil: Now, you’re onto something! By focusing on a unique and sustainable idea, you can attract customers who share your values.

Vikas: “But what if my passion and expertise are in different areas? Can’t I build a business around both?”

Sanil: “That’s a common challenge, but it’s important to find a way to blend them together in a way that makes sense. For example, if you’re passionate about fitness and have expertise in nutrition, you could start a business that combines both. Maybe a healthy meal delivery service or a gym with a nutrition program.”

Vikas: “That’s a great idea! I never thought of combining my passions and expertise like that.”

Sanil: “Exactly! The key is to find a unique angle that sets your business apart from competitors. That’s why focusing on the core is so important. It gives you a clear direction and helps you stand out in a crowded market.”

Vikas: “Okay, I think I understand now. So, how do I go about identifying my core?”

Sanil: “Start by asking yourself what problem your business solves. What need does it fulfill for your customers? Once you have a clear answer to that, you can build everything else around it. Your marketing, branding, product development, and more should be centered around fulfilling that need.”

This conversation highlights the importance of finding a unique angle for your business and combining your passions and expertise in a way that makes sense. It also emphasizes the importance of identifying the problem your business solves and building everything around it.

To summarize, focusing on the core of your business is crucial for success. It’s the center point around which all other aspects of your business revolve, and it gives you a clear direction and purpose. By identifying your core and building everything else around it, you can stand out in a crowded market and create a strong foundation for sustainable growth.

Some important pointers to identify your core include finding a unique angle that sets your business apart from competitors, combining your passions and expertise in a way that makes sense, and identifying the problem your business solves and building everything around it.

Let’s start with Amul, which is an Indian dairy cooperative based in the state of Gujarat. Amul was founded in 1946 with the goal of creating a sustainable and profitable market for milk producers in the region.

They achieved this by focusing on their core idea of providing affordable and high-quality dairy products to consumers. This strategy helped them build a loyal customer base and become the largest dairy cooperative in the world.

Amul’s success story is not without its challenges, however. In the 1960s, Amul faced a threat from foreign companies like Nestle and Glaxo, which had entered the Indian market and were offering products at lower prices.

In response, Amul launched a campaign promoting the benefits of buying locally produced products. The campaign was a huge success, and it helped Amul to not only survive but also thrive in the face of competition.

Now let’s turn our attention to Kingfisher Airlines, which was founded in 2005 by Indian business magnate Vijay Mallya. Kingfisher Airlines was initially successful, quickly becoming the second-largest airline in India by market share.

However, the company’s fortunes began to decline after it expanded into unrelated industries like real estate, which drained its resources.

In addition, Kingfisher Airlines was plagued by operational and financial problems. The company struggled to pay its employees and vendors, and its planes were frequently grounded due to maintenance issues. In 2012, the Indian government suspended Kingfisher Airlines’ license to operate, effectively ending its business.

Finally, let’s look at Kodak, which was once a household name in the photography industry. Kodak was founded in 1888 and grew to become a dominant player in the film and camera market. However, the company failed to adapt to the digital age and lost its core business as a result.

In the late 1990s, Kodak started to develop digital cameras, but it was slow to recognize the potential of digital photography. The company continued to focus on its film business, even as sales declined, and it missed out on opportunities to develop new products and services in the digital space. By the time Kodak realized its mistake, it was too late, and the company filed for bankruptcy in 2012.

Certainly! The Tata Group is another great example of a company that has successfully focused on its core. Tata’s core idea is to create a positive social impact through its business activities. This idea is reflected in the company’s mission statement, which reads, “To improve the quality of life of the communities we serve globally through long-term stakeholder value creation based on leadership with trust.”

One example of how Tata has stayed true to its core is through its work in the renewable energy sector. The company has invested heavily in renewable energy, such as wind and solar power, which not only helps to reduce its carbon footprint but also provides clean energy to communities in need. In addition, Tata has also launched several initiatives aimed at improving the lives of people in the communities it serves, such as providing clean drinking water and healthcare services.

In contrast, businesses that have lost sight of their core have struggled to stay afloat. For example, Kingfisher Airlines was once a leading airline in India, but it expanded too quickly into unrelated industries like real estate, which ultimately led to its downfall. As the company’s debt grew, it was unable to pay its employees and suppliers, and the airline was forced to shut down.

Similarly, Kodak, once a leading manufacturer of photographic film, failed to adapt to the digital age. Despite inventing the digital camera in 1975, Kodak was slow to embrace digital technology and continued to focus on its traditional film business. As a result, the company struggled to stay relevant in a rapidly changing industry and eventually filed for bankruptcy.

The examples of Amul, Tata Group, Kingfisher Airlines, and Kodak all illustrate the importance of staying true to your core idea. By staying focused on what you do best and building your business around your core, you can create a strong brand and sustainable growth.

Identifying the core of your business is a crucial step towards achieving success. It allows you to determine what sets your business apart from others, what you want to be known for, and what your customers value the most about your business. With this knowledge, you can establish a strong foundation for sustainable growth by building everything else around your core and remaining faithful to it as your business expands.

The importance of focusing on the core of your business cannot be overstated. It is what distinguishes your business from competitors and makes it valuable to customers. By staying true to your core, you can avoid distractions that might otherwise derail your business and instead concentrate on achieving sustainable growth.

This book is an invaluable resource for entrepreneurs who wish to focus on their core and establish successful businesses. It offers practical advice and examples that readers can apply to their own ventures. By reading this book, entrepreneurs can learn how to identify their core and use it to their advantage, creating a firm footing for their business that will help them achieve long-term success.

Sunil G Kushwaha ( B.Sc, MBA, LLM )
Co-founder - AIWS ACCOUNTECH
Date:- 25/12/2022