Successful classical mass market models based on innovation, brands and volumes are attacked by new players that focus on a part of market, resegment it and that bypass the traditionnal retailers and distributors. Facing a risk of losing valuable customers and crucial operational leverage, what can established players do to avoid value outflow?
No industry can grow faster than 8-12% per year in the long term. All products, technologies, business models, uses, etc. follow lifecycles of different lengths, sometimes as long as decades. After having grown strongly, their growth stabilises and then reverses, even disappearing to the gain of other products, technologies, business models and uses.
Published in La Jaune et la Rouge, November 2015
Companies cannot create long-term value without growth. More than ever, growth depends on speed. Today, it has become the key element of strategy. An analysis of companies with a long track record of success shows that these companies not only move in the right direction but, more importantly, do so faster than their competitors. It is also observed that they succeed in this because of, or rather in spite of, their organization. How can an organization become a driver for growth?
What is a “cash cow”? It is a business area that has experienced strong growth over a period of ten to twenty years, or even more, by innovating regularly to develop its market, breaking into new countries and customer segments, concentrating its target market and securing a leadership position within it, and, in doing so, making a critical contribution to value creation for the group.
Small and medium-sized enterprises (Mittelstand) from the German-speaking region have made skilful use of the opportunities offered by developing markets. Thanks to successful business models, they have been able to achieve above-average growth in recent years and develop into niche market leaders.
After a long period of strong development, German retail “champions” are currently experiencing low rates of growth. How to resume strong and long-term growth, without diluting profits? Which growth initiatives are to be pursued and how to fund them? How to gear the organization for growth?
Amazon, Asos, Kiko, Fressnapf, La Plateforme du Bâtiment … are all retailers that barely existed in Europe ten years ago and now are threatening incumbents that were once considered unbeatable. How best to detect new “barbarians” when they are not yet at the gate? How to react to their disruptive business models and how to win?