core business


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core business

a division of a conglomerate firm which is considered to be central to the firm's corporate success insofar as it embodies the firm's CORE SKILLS and competencies and generates the bulk of its sales revenue and profits. See DIVERSIFICATION, DIVESTMENT.

By contrast, a non-core business is one which makes only a relatively small contribution to the firm's overall activities. However, the dividing-line between core and non-core businesses can be elastic when viewed over time. For example, BAT Industries' main core business was and continues to be tobacco products but from 1983 it developed through acquisitions a large insurance division which it also regarded as a core business, until it was demerged in 1997.

core business

the particular products supplied by a firm that constitute the heart of its business. These are generally products in which the firm has a competitive advantage. Over time the firm may begin to supply other products that may be associated with its core business but are more peripheral to the firm and its operations. See DIVERSIFICATION.