- Hardcover: 194 pages
- Publisher: Harvard Business Review Press; 1 edition (February 2001)
- Language: English
- ISBN-10: 1578512301
- ISBN-13: 978-1578512300
- Product Dimensions: 9.5 x 6.4 x 0.8 inches
- Shipping Weight: 1 pounds
- Average Customer Review: 4.0 out of 5 stars See all reviews (28 customer reviews)
- Amazon Best Sellers Rank: #445,810 in Books (See Top 100 in Books)
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Profit From the Core : Growth Strategy in an Era of Turbulence Hardcover – February, 2001
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Spawned by a 10-year study of 2,000 firms conducted at Bain & Company, a global consultancy specializing in business strategy, Profit from the Core is based on the fundamental but oft-ignored maxim that prolonged corporate growth is most profitably achieved by concentrating on a single core business. To help companies identify this true essence, narrow their focus accordingly, and move forward in a manner that builds upon existing structure, Bain director Chris Zook and former Bain director James Allen present "a set of practical and proven principles, diagnostic tests, and questions for management teams to use as tools for reexamining or revising their strategies in search of the next wave of profitable growth." Bolstering their argument with real-world examples--including companies such as Disney, which succeeded by taking this approach, and Bausch & Lomb, which faltered by eschewing it--the authors show how to effectively uncover true corporate strengths, elevate them to realize their potential, identify related new businesses that could be successfully added, and even completely redefine a core when confronted with factors forcing such action. (For example: they offer a step-by-step method for mapping "adjacent opportunities" that may prove complementary, ranking them according to potential, and developing strategies to further evaluate and ultimately implement them.) The result is recommended for anyone tired of the management theory du jour who seeks a proven way to propel their company into the future. --Howard Rothman
From Publishers Weekly
In this short, focused and well-reasoned book, Zook, the head of worldwide strategy for the prestigious consulting and investment firm Bain & Co., and Allen, head of a venture-capital company, argue persuasively that focusing on what a business does best is the easiest and most efficient way for companies to grow and be profitable. This idea isn't new, of course: in the 1980s, Tom Peters and Robert Waterman, in their classic In Search of Excellence, called it "sticking to your knitting"; a decade later, most notably in the Harvard Business Review, Gary Hamel and C.K. Prahalad described the concept as focusing on "core competencies." But, Zook and Allen maintain, as firms rushed to embrace the Internet, executives forgot this basic truth. Taking the idea one step further, they contend that by looking at what a firm does best, executives will also find it easy to spot inefficiencies within their businesses. Based on a study of 2,000 companies, the book concludes that three factors differentiate growth strategies that work from those that don't: (1) make sure to get everything possible out of the core business, (2) expand into related businesses and (3) redefine the business before someone else (e.g., a competitor) does. Zook and Allen stress "how to," giving managers a list of questions to ask and signposts to watch for as their companies evolve. As managers everywhere are re-examining their businesses in light of recent fallout among dot-coms and major layoffs and restructuring among even the most stalwart of companies, this book's timing could not be better. (Mar.)
Copyright 2001 Reed Business Information, Inc.
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· The company must reach its full potential in its core business or businesses.
· Once a company has reached its potential in its core business, it must then expand to the logical businesses that surround the core business.
· A company must preemptively redefine its core business in response to the first signs of changes in the marketplace.
The foundation of sustained growth, according to these authors, rests in establishing a strong foundation: a clear definition of the company's core business. The authors present a series of ten questions designed to aid businesses in defining their core business clearly.
There are pitfalls along the way, and the authors present several growth pitfalls to avoid:
· Expanding toward an entrenched position, where the company has relatively low odds of achieving leadership
· Overestimating the profit pool.
· "False Bundling"- trying to be all things to all customers.
· Invaders from unexpected fronts.
In order to deal with market changes, the authors offer five key changes that are most threatening to a company's growth:
· Erosion of low-end product segments.
· Erosion of customer segments.
· Erosion of micro-segments.
· Erosion of traditional business boundaries.
· New intermediaries and new control points.