Jack Welch or the value to an active management of the business portfolio
/in Articles /by WPestinGeneral 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 for 20 years?
False perspectives
/in Articles /by WPestinThe 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 this is true. However, this is a biased perspective, based on export industries.
The winners take it all
/in Articles /by WPestinGrowth beyond the niche
/in Articles /by WPestinLong-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.
Energy and growth
/in Articles /by WPestinEconomic 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 and influence the evolution of the energy offer and demand? What should we do?
Micro vs. Macro strategies
/in Articles /by WPestinMicro 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 Articles /by WPestinIn 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?
/in Articles /by WPestinFounded 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 outstanding service. Consequently, is there a strategy to bypass Amazon for an Internet player selling products to consumers? What are the possible strategies for Internet players?
The illusion of low interest rates
/in Articles /by WPestinInterest 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, warrant optimism, as a sign of a transition between two major economic cycles? Only one thing is for sure. Those rates will rise back up. Their average level is at 5% over very long periods. A hike back to those levels will strongly challenge the value of assets.