The significance of core competencies is now well recognized. Its role in enabling firms to respond to customers' rapidly changing needs and combat competition is well documented. However, the applicability of this concept in regulated and protected economies is an area that needs the attention of management scholars. In this paper we briefly review the concept of core competence and examine the manner in which several firms in India built their strategies around some identified core competencies and also how these in turn enabled the firms to achieve superior performance. The paper also discusses in detail the capability development process in Telco, the leader in the Indian commercial vehicle industry.