Theory of evolution says continuous change is inevitable and if one does not evolve, they will perish. This is true for businesses and corporations. If corporations do not evolve then their survival is in jeopardy. One thing key to survival is a core competency that the company has built over time.  Yes, it is important to make and sell products or services. However, I believe products and services are just the end product or end result.

Corporations that are successful and continue to survive have shown that they focus more on building core competency. Based on their core competence these corporations have build products or services that can be applied to variety of applications. Successful companies are more eager to build competence that will help them become world leaders.  They do not solely focus on products alone.

Among others, one place to look for such corporations is the list of dividend aristocrats. Many in this list have built some competency around which they make and sell products. Proctor and Gamble ( ), Clorox, McDonalds ( ), Sysco, Family Dollar Stores ( ), Coca-Cola ( ),  and PepsiCo are corporations that have strong brand value, franchise network, cost controls, distribution network that it is hard for competitors to eat away their lunch.

In the technology sector, companies like ( ) with is enterprise level integration, Qualcomm ( ) with its communication technology, Analog Devices and Linear Tech with their high performance analog technology have built core competency. Even in these recessionary global economic conditions, these companies are able to garner 40%+ or 50%+ margins on their products. In case of LLTC, its margins are in excess of 65%.