Final answer:
The core component of a product is central to its variations, and changes to it can be costly, requiring capital investment. Focusing on core competencies can lead to greater business success. Differentiation of products is another strategy for competitive advantage.
Step-by-step explanation:
The core component of a product refers to the central element upon which product variations are based within a business platform. When a company focuses on its core competency, it often leads to more success than attempting to offer a wide array of products. This is because changes to the core platform can be complex and costly, as they may require additional capital investment and can impact existing product processes.
It is important to note that, at times, the core components of a product may have less physical material value compared to the technology and ideas that enable the product's functionality. In considering differentiated products, a firm may attempt to distinguish its offerings through various means such as physical attributes, location, intangible aspects, or brand perception, thereby creating a unique competitive advantage.