Reason they're still competitive: Excellent individual offensive performances
Turning to the offense, a lot of the things that they needed to go right to be competitive have gone right. Their core four of Nico Hoerner (98 wRC+), Dansby Swanson (119 wRC+), Ian Happ (124 wRC+), and Seiya Suzuki (131 wRC+) are all off to solid starts offensively. Even though he's out with an injury, Cody Bellinger (121 wRC+) has also been more than anyone could've realistically hoped for following his disastrous final years in Los Angeles. Whether he can keep that up when he comes back is another question, but the results have looked promising so far.
It's also worth acknowledging Patrick Wisdom's hot start even though he's cooled off significantly. Through March and April, he put together an impressive .250/.324/.641 slash line with 10 homers, good for a 154 wRC+. He's a streaky hitter, but the power, especially with some lineup protection, is invaluable. Even Yan Gomes has looked very solid to start the year with a 103 wRC+ from the catching position.
Then there's Christopher Morel who has been nothing short of phenomenal through his first 17 games. He may have an absurdly high 36.6% strikeout rate, but that doesn't matter much when he also has a 185 wRC+ and 9 dingers already. If he can maintain at least some of that production throughout the year while punching out a bit less, his presence will be a major boon for this team.
As a whole, the Cubs have a team wRC+ of 105 which is perfectly solid. With that, they rank 11th in baseball, ahead of some heavy hitters like the Yankees, Padres, Astros, and the surprising Diamondbacks. That's an encouraging result for a team that figured to be a bit light on hitting.