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Letter from David Tang – ”Are you an executive?”

 

I have received many emails from business executives stating that have found our business framework/methodology presentations useful.  Business frameworks are in-depth business training guides—the same used by top global consulting firms when they deploy their consulting project teams to Fortune 500 companies.

These documents were developed by our network several hundred contributors, including dozens of world renown Subject Matter Experts in their respective fields. (Read more about our authors here.)  Flevy is now the leading provider of “business frameworks,” covering well over 250+ management topics from Blue Ocean Strategy to Rapid Process Improvement.  You can peruse all of our management topics here.

In this email, I’d like to introduce you to 3 specific growth frameworks.
Five Stages of Business Growth
This framework is based on the fact that all businesses experience common problems that arise at similar stages in their development. It is geared more towards the unique aspects of the business, and not the industry.  Each stage of growth is characterized by a different impetus to growth and threatened by a different crisis.  Each stage also requires a different management style, a different strategic focus, and has a different state of systems and processes.
For instance, in the initial stage of “Survival,” the owner manages everything and everyone. There are no defined business processes–most processes are ad hoc and not repeated. The management and reporting of the organization becomes more complex as the organization grows; by Stage 3, “Success,” management is organized Functionally; by Stage 4, “Take Off,” it is Divisional; lastly, in the final “Resource Maturity” stage, it is Line and Staff. By the last stage, the organization is considering implementing a full Enterprise Resource Management (ERP) system to better manage its systems and processes.
Consolidation Curve (or Endgame Curve)
This framework based on the notion that all industries consolidate and follow a similar course through 4 stages.  This framework is based on a study of 25,000 firms globally, representing 98% of the global market cap, conducted by the global strategy consulting firm AT Kearney.  Whereas the previous framework isolates characteristics of the business, the Consolidation Curve framework places the business within the context of its industry. For instance, this framework shows that merger actions and consolidation trends can be predicted. When the industry is in the Scale phase, growth is fueled by M&A activity rampant across the industry, as the biggest players are vying for market share.
Using the Consolidation Curve as guidance, a business can strengthen its consolidation strategies and facilitate merger integrations. A niche player can also determine the appropriate niche strategy to use and when is the best time to be acquired. Every major strategic and operational move should be evaluated with regard to the industry’s stage in the Consolidation Curve. Likewise, endgames positioning also offers a guide for portfolio optimization.
Growth Strategy
This last framework document presents a number of accepted management models related to Growth Strategy. You can consider this a more comprehensive toolkit on the topic.  As a business grows, it must traverse 3 horizons of growth, each with a different focus:

  • Horizon 1: Extend and defend the core business.
  • Horizon 2: Build emerging businesses.
  • Horizon 3: Create viable options for future growth.

Each horizon has different objectives and requires different executives to manage and foster its growth. For instance, the initial phase requires Strong Operational Managers and Leaders. The last phase requires Visionaries and Unconventional Thinkers.

If you are looking for anything in particular, please let me know. I’d be glad to help.

Thanks.

Dave

David Tang / flevy.com

Corporate Strategy

www.flevy.com – Marketplace for Premium Business Documents

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