Entries by WPestin

Jack Welch or the value to an active management of the business portfolio

General Electric experienced a strong growth of its revenue, profitability and stock price between 1980 and 2000 under Jack Welch’s leadership. Since then, its performance has been weak ; its return to shareholders has been nil. Why has his successor not experienced the same success even though he had seen Jack Welch run the company […]

False perspectives

The industrial situation of France seems worrying from a macroeconomic perspective. It would lack competitiveness both in low and high value-added industries All this is true. However, this is a biased perspective, based on export industries. The share of manufacturing in the French GDP keeps decreasing. France is no longer a major industrial power. All […]

The winners take it all

A few politically incorrect insights, derived from the fact-based analysis of public data regarding the key drivers of the global economy: energy resources, agricultural resources, demography, intellectual capital. English French

Growth beyond the niche

Long-term growth is the key element and driver for companies to increase their enterprise value. However, in the long run every market offers only limited potential for growth: market growth decelerates, innovative power declines, commoditization tendencies set in, established competitors concentrate the most attractive segments, margins erode and offer less opportunities for profitable growth. French

Energy and growth

Economic growth and growth of energy demand are correlated. Besides, global energy resources are mainly fossil, and therefore limited. As a result, future sources of economic growth will rely on access to energy resources (existing or new) and on energy efficient usages and businesses. Which industrial or public players have the financial means to invest […]

Micro vs. Macro strategies

Micro strategies make it possible to concentrate an activity. Macro strategies make it possible to concentrate an entire industry. The two types of strategy are complementary and must be rolled out over different time horizons. Without the former, there will be no profitability. Without the latter, there will be no growth over the long term. […]

Where are the middle classes going?

In 2030, the middles classes in emerging Asia will represent 60% of the world’s middles classes. The center of the industrial, economic, cultural, financial and political world will have moved in 15 years. This represents an unprecedented event for the modern economy. What company could possibly want to stay away from this this tremendous opportunity? […]

Who can beat Amazon?

Founded in 1994, Amazon has experienced strong growth of over 20% per year since then; its revenue now exceeds $100Bn. Its geographical locations have developed at a robust pace and its product offering has expanded as far as to fresh groceries in the US. Its success has been based on technological leadership, competitive prices and […]

The illusion of low interest rates

Interest rates on 10-year US Treasury Bonds are at 1,6%. They have decreased continuously since their peak in 1982 (at 6%). Are those levels a harbinger of a major crisis, the bursting of a financial bubble, a series of bankruptcies, a lack of economic growth or increased expectations of volatility? Do they, on the contrary, […]

The magic of long-term growth

Strategic theory has always differentiated between high-growth and low-growth businesses. It is a useful perspective, especially to anticipate investment needs as well as the ability to gain market shares and to change competitive structures. However, the most discriminating perspective as to value creation is not the magnitude of growth, but its duration. English French German