120 • 100 GREAT BUSINESS IDEAS
Core activities are the unique skills that differentiate an
organization from its competitors and persuade customers of its
superiority. Context activities are the processes needed to meet
the industry standard, without surpassing it. Getting the balance
right between the two is essential for keeping focused on the right
things—it is surprisingly tricky.
The idea
Core activities are known as business idea factors, while context
activities refer to hygiene factors. For example, a core activity for
Microsoft might be its ability to develop new software, whereas
context (hygiene) factors include its ability to process orders and
dispatch products. Both are vital, but only one (the core) is where
the real value of the business lies.
Shareholders typically want to concentrate on core activities, as
these tend to raise share prices. Also, it is possible for businesses to
become too involved in the hassle of context activities and lose focus
on what differentiates them. Catering to context activities is vital
for remaining in a market, while focusing on core activities grows
business and increases competitive advantage.
Business strategist Geoffrey Moore recommends balancing core and
context by outsourcing or automating context activities. In this way,
you can ensure context activities are being handled competently,
are cost-effective, and are enjoying the economies of scale of a
specialist company. Another benefi t is the ability to devote increased
investment to gaining a competitive edge within your market.