Non-core

Describing activities, assets, or functions of an organization that are not essential to its primary business operations or strategic objectives. These elements, while possibly valuable or revenue-generating, are secondary in importance compared to the core competencies and activities that define the organization's central purpose. The designation 'non-core' often implies that these areas could be outsourced, divested, or managed with a lower level of investment or strategic focus. The objective of this assessment can be to identify potential efficiencies, streamline operations, and concentrate resources on core business.

Non-core meaning with examples

• A manufacturing company might consider its IT services a non-core function. While essential for running operations, it doesn't directly contribute to their core business of producing goods. Therefore, the company could choose to outsource their IT department to a third-party provider, reducing costs and allowing them to focus resources on core manufacturing processes and product development. Outsourcing IT is a common example of leveraging non-core functions.
• For a retail chain, real estate ownership, beyond its store locations, could be considered non-core. Owning office buildings or distribution centers might not align with the core business of selling goods to customers. This determination may lead to strategic decisions such as selling these properties or redeveloping them to maximize profit and release capital to better focus on its core business of maximizing retail revenue and customer experience.
• A financial institution might deem its marketing and advertising department as a non-core business function. They might outsource these activities to specialized agencies, freeing up internal resources and expertise to concentrate on their core financial services, such as lending, investments, and wealth management. These functions are often handled by a specialised agency.
• A university might identify its landscaping and grounds maintenance as a non-core function, especially if it is not located in a historical or cultural district where the buildings are part of its history. Outsourcing this to a landscaping firm could reduce operational overhead, letting the university focus on its core activities of teaching and research, while still maintaining the beauty and function of its campus, especially if outside a major city.
• A technology company may classify its employee training program as non-core, though important, because it is not directly associated with its software development. This leads to various decisions, such as providing access to virtual training platforms or engaging an external consultancy to handle the training program, so the focus can remain on its core business of technological research and product development.