First defined as a tool for financial investments, this model states that every entity should define its boundaries of competence and then stick to doing what it knows and does best. This circle of competence helps a person, a team, or an organization in making smarter decisions and not wasting resources in areas beyond their expertise and knowledge.
Diagrams
Originated from/Coined by
Warren Buffet and Charlie Munger
Further Reading/ References
https://www.businessinsider.in/The-Circle-Of-Competence-Theory-Will-Help-You-Make-Vastly-Smarter-Decisions/articleshow/26921971.cms
https://en.wikipedia.org/wiki/Circle_of_competence