Choosing the best option for growth. More often than not we find our clients have too many choices rather than too few. The difficulty lies in prioritizing options and determining which one is the best path forward. You may find yourself in a similar situation. With so many options how can you choose? Although it …
Tag: growth pathways
M&A – The Route to Success?
The polyolefins industry, like so many others, is evolving significantly. Growth in emerging markets and Asia has skyrocketed while European and North American markets have matured. Last week I was invited to speak at the Future of Polyolefins Conference 2014 in Dusseldorf, Germany, where top executives from key industry players such as Borealis AG and …
What Business Are You In?
Let’s admit it right away: This is a trick question. The correct answer is usually not the first answer. Here’s a classic example from the annals of corporate America: Union Pacific thought they were in the business of railroads—the commonsense answer. In reality, they were in the business of mass transportation. Had they recognized this early …
Discounts Don’t Drive Growth for Consumer Staples
Facing a stagnant market, retailers of consumer staples have turned to aggressive discounts to drive growth. According to the Wall Street Journal, more than 50% of consumers’ purchases include markdowns! More Discounts is NOT More Growth Businesses in non-growth or declining growth markets understandably must find new ways to capture market share. However, offering more …
Expanding in a Declining Market
Verso Paper announced that it would acquire NewPage Holdings in a deal worth $1.4 billion. NewPage rejected a similar offer from Verso in 2012, also valued at $1.4 billion. So what changed this time around? Quite simply, it’s the environment: Both paper companies realize the paper market is shrinking and that’s not about to change …
When Exiting is the Best Growth Strategy
If your company’s organic growth has hit a plateau or is in decline, leaving the current market may be your best option. If the odds against your success are rising steadily, I strongly encourage you to think about divestment. After seven years, British supermarket chain Tesco is exiting the U.S. market. Tesco is selling its …
Know Your Risk Profile
When you think about your company’s growth, ask yourself, “What is our risk tolerance?” The answer is key to formulating your strategy. You cannot succeed with a plan for growth that pushes too far beyond the level of risk that is acceptable in your company. If you are the sole owner, the level of risk …
Growth Pathway # 5: Pursue External Growth
The fifth and final pathway to growth is external growth. Here, expansion is achieved by engaging with entities outside your company. There are many forms of engagement, of which acquisition is but one. External growth can be one of the most exciting paths to growth and in many cases, it should top your list of …
Growth Pathway # 4: Do Nothing
Of course, doing nothing is rarely if ever a pathway to growth. However, it is a choice that companies actually make every day. ‘‘Choice’’ may be an overstatement. Few executives or board members sit down, open their flipcharts, and plan a careful do-nothing strategy. They drift into it by default. When things seem to be …
Growth Pathway # 3: Be the Low Cost Provider
Sometimes organic growth can be achieved by dramatically cutting costs. I call this the “jellyfish strategy” : you go up when the tide is up and out when the tide goes out. There may not be many natural predators, so you will survive, but this approach is unlikely to drive long-term expansion. Note, that being …
