Adjacency judgments – which, if any, related businesses should your firm expand into – are among the most difficult and critical decisions senior executives face as they search for sources of sustained and profitable growth. These determinations can make or break a company. The key is in understanding how to systematically boost your odds of success by moving into territories at the fringes of your core business. “How” begins with an in‐depth knowledge of the strengths and weaknesses of your core. For companies in leadership positions, the chances for adjacency success are nearly three times higher than for followers. But for distant followers, adjacencies are almost never the answer. Rather, their perilous route to success comes from three strategies: shrinking to grow around a smaller, stronger core; consolidating with another competitor to build scale; or coming out with a breakthrough product. The cases show examples of strategies for a range of core business situations.
Strategy & Leadership – Emerald Publishing
Published: Aug 1, 2004
Keywords: Leadership; Capital growth; Competitive advantage; Management strategy
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