Some laser applications consist simply of concentrating light into a small spot. Two example applications are laser welding and cutting. In these cases a CO2 laser is often used which needs a regulated power supply, a water cooling system, and a supply of CO2 gas.
Why do these applications use a laser instead of a simpler (i.e. incoherent) light source such as an AC powered arc lamp?
There are many reasons why highly monochromatic light, such as that emitted by a laser, is useful for delivering a large amount of power to a small spot.
First of all, incoherent light sources such as a lamp are extended sources which means that they are emitting light from a piece of material which takes up a finite amount of space. When focusing this light to a point, the focal spot is limited by the size of your source multiplied by the magnification of your imaging system. This may sound like a small effect, but if you want to focus the light to a spot size which is on the order of the wavelength ($~1\ \mu\text{m}$) it becomes important. Lasers, on the other hand, act like true point sources and can be imaged to spot sizes smaller than the wavelength of the light.
A second issue with incoherent light sources is that they generally emit light in all directions. So, even if you can generate an equivalent amount of optical power, it is much more difficult to gather it all up into a collimated source which is needed prior to focusing to a spot.
A final advantage of lasers is their monochromaticity. This is useful because the wavelength can be precisely chosen to match a particular application. CO2 lasers, for instance, emit at $10.6\ \mu\text{m}$; which is absorbed well in a wide range of materials but not all that well in metals. Nd:YAG lasers and its harmonics (the three wavelengths labeled as 'solid-state laser' in the image below) are, however, absorbed well in metals and can be used for metal processing. With incoherent sources the light is emitted over a broad range of wavelengths which may or may not exhibit desirable properties in the material you are trying to process.
This is just an addition to the answer of Chris Mueller.
When you think about lasers, you always think about an aperture with lot of mirrors, lenses and optics in general. Lets say that you manage to create a focused (wide spectrum) beam at one point, now you want to bring it to the point of application. With a wide spectrum it won't work well, as the beam will lose focus for the different wavelengths. while passing through the optics.
To give you a picture of the optical phenomena look at this famous album cover. You will notice that the exiting light is spread out(along the spectrum) and lost focus.
You could refocus it, but that is impractical. For other considerations refer to the answer of Chris Mueller.
