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Meaning of Core Business Operations
In layman’s language, the term “core business operations” refers to the organization’s main or essential area of activity for which it was founded or came into existence. It does not only focus on the mission and vision of the organization but also on building better business operations strategies by;
- Controlling market forces and supply chain management
- Improving the quality of technology
- Expanding the business marketplace and acquiring new businesses
- Increasing revenue generation
- Better customer base acquisition and customer relationship management
- Developing new areas of activities
It means that the success of an organization does not only depends upon the functioning and performance of various departments but also the company’s coordination in managing and performing various departmental activities for conducting the core business operations.
Examples of Core business operations/models
1. The core business model of Uber is to provide on-demand services to its users. It provides a virtual mobile platform that connects users with taxi or cab drivers. Although cab drivers use their cars while performing their services. Uber earns 20-30% of the total fare amount.
2. The core business model of Amazon is to provide an end to end virtual or e-commerce shopping experience to its customers. It connects customers (users) with the products listed by various trusted sellers. Amazon earns money through subscriptions for prime services, retail services and web services. Amazon charges 6%-25% professional fees on every product sold by the sellers on its platform.
3. The core business model of Walmart is to provide offline and online retail services such as health and fitness, grocery and general merchandise. Walmart charges only referral fees (based on the product category) and it does not impose any charges on maintaining seller accounts.
Core vs Non-core business operations
Example
- Uber
- Core business operations– The core business operations of uber are mentioned above in example (1).
- Non-core business operations– Apart from the core business operations, uber performs a few non-core business operations such as Uber Eats which provides food delivery services to its users (customers) is not the main/core business of Uber.