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To identify your core competencies, use the following steps:

Brainstorm the factors that are important to your clients.

If you're doing this on behalf of your company, identify the factors that influence people's purchase decisions when they're buying products or services like yours. (Make sure that you move beyond just product or service features and include all decision-making points.)

If you're doing this for yourself, brainstorm the factors, for example, that people use in assessing you for annual performance reviews or promotion, or for new roles you want. (It might be difficult to come up with truly unique core competencies, but keep the idea in mind and work to develop some.)

Then dig into these factors, and identify the competencies that lie behind them. As a corporate example, if customers value small products (for instance, cell phones), then the competence they value may be "component integration and miniaturization."

Brainstorm your existing competencies and the things you do well.
For the list of your own competencies, screen them against the tests of relevance, difficulty of imitation, and breadth of application, and see if any of the competencies you've listed are core competencies.
For the list of factors that are important to clients, screen them using these tests to see if you could develop these as core competencies.

Review the two screened lists, and think about them:
If you've identified core competencies that you already have, then great! Work on them and make sure that you build them as far as sensibly possible.
If you have no core competencies, then look at ones that you could develop, and work to build them.

If you have no core competencies and it doesn't look as if you can build any that customers would value, then either there's something else that you can use to create uniqueness in the market (see our USP Analysis article), or think about finding a new environment that suits your competencies.

Think of the most time-consuming and costly things that you do either as an individual or a company.

If any of these things do not contribute to a core competence, ask yourself if you can outsource them effectively, clearing down time so that you can focus on core competencies.

For example, as an individual, are you still doing your own cleaning, ironing and decorating? As a small business, are you doing you own accounts, HR and payroll? As a bigger business, are you manufacturing non-core product components, or performing non-core activities?