Profit from the Core

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The Profitable Core

The idea of a core set of economic activities is as old as management science itself. David Ricardo’s writings in 1817 on comparative advantage in trade were, in part, an attempt to determine the core set of activities around which a nation should focus its resources. Alfred Marshall’s work in the late 1800s on increasing returns to scale anticipates the idea of business definition and competitive advantage from a growing core. Economists in the 1930s and 1940s examining antitrust matters constantly encountered the issues of business definition and how far market power extended from a core business.

During the 1980s, an era of breakup artists and corporate restructuring, many business writers, such as Michael Porter, documented ...