quinta-feira, fevereiro 29, 2024

"faster growth must be weighed against the potential harm it creates"

"While sustained profitable growth is a nearly universal goal, it is an elusive one for many companies.

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And the majority of firms in the top quartile were unable to sustain superior growth performance for more than a few years. ... In our analysis, we found that only about 15% of the companies in the top growth quartile in 1985 were able to sustain their top-quartile performance for at least 30 years.

Over the past two decades, I have tried to understand why some companies are more effective at sustaining growth and what senior leaders can do to navigate the organizational challenges it poses.

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In my research, I've found that most companies think of growth potential in terms of "demand side" factors: external trends, market share, and other metrics such as total addressable market. These are important, of course, but they are only half the story. Supply-side constraints matter just as much: High demand potential does not translate into profitable growth unless an organization has or can develop the capabilities needed to meet that demand. So a strategic perspective on growth means analyzing the company's sustainable growth rate (considering all resources, not just money) and then thinking through the trade-offs inherent in faster or slower growth. For instance, there may be excellent strategic reasons to grow more quickly (for example, a market where first-mover advantages or network effects are present), but that faster growth must be weighed against the potential harm it creates.

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The basic question that companies must address is: In which markets do our capabilities and other unique resources (such as brand, customer relationships, reputation, and so on) provide us with a competitive advantage? A scale-focused strategy will tend to revolve around deep, market-specific capabilities. 

Successful scope strategies, in contrast, require the development of broader, general-purpose capabilities and resources that can be leveraged across market segments and lines of business. In some industries, brand equity is the basis for scope expansion."

Trechos retirados de "How Fast Should Your Company Really Grow?

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