Finding your next core business

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Finding your next core business

  1. 1. Finding Your Next CORE Business
  2. 2. Contents <ul><li>Introduction </li></ul><ul><li>Reason for changing core business </li></ul><ul><li>How to evaluate your core business? </li></ul><ul><li>Hidden assets </li></ul><ul><ul><li>Undervalued business platform </li></ul></ul><ul><ul><li>Untapped insights into customers </li></ul></ul><ul><ul><li>Underexploited capability </li></ul></ul><ul><li>Seven steps to a new core business </li></ul>
  3. 3. Introduction
  4. 4. Reasons for changing core business <ul><li>Profit pools </li></ul><ul><li>Inherently inferior economics </li></ul><ul><li>Growth formula that cannot be sustained </li></ul>
  5. 5. Evaluate your core business <ul><li>What is the state of our core customers? </li></ul><ul><li>Profitability </li></ul><ul><li>Market share </li></ul><ul><li>Retention rate </li></ul><ul><li>Measure of customer loyalty </li></ul>
  6. 6. <ul><li>What is the state of our core differentiation? </li></ul><ul><li>Definition and metrics of differentiation </li></ul><ul><li>Relative cost position </li></ul><ul><li>Business models of emerging competitors </li></ul><ul><li>Increasing or decreasing differentiation </li></ul>
  7. 7. <ul><li>What is the state of our industry’s profit pools? </li></ul><ul><li>Size, growth, and stability </li></ul><ul><li>Share of profit pools captured </li></ul><ul><li>Shifts and projections </li></ul><ul><li>High costs and prices </li></ul>
  8. 8. <ul><li>What is the state of our core capabilities? </li></ul><ul><li>Inventory of key capabilities </li></ul><ul><li>Relative importance </li></ul><ul><li>Gaps vis-à-vis competitors and future core needs </li></ul>
  9. 9. <ul><li>What is the state of our culture and organization? </li></ul><ul><li>Loyalty and undesired attrition </li></ul><ul><li>Capacity and stress point </li></ul><ul><li>Energy and motivation </li></ul><ul><li>Alignment and agreement with objectives </li></ul>
  10. 10. Hidden Assets <ul><li>In 21 of the 25 companies, a hidden asset was the centerpiece of the new strategy. </li></ul><ul><li>Hidden assets fall into three categories: </li></ul><ul><ul><li>Undervalued business platform </li></ul></ul><ul><ul><li>Untapped insights into customers </li></ul></ul><ul><ul><li>Underexploited capability </li></ul></ul>
  11. 11. Undervalued business platform <ul><li>Undeveloped adjacencies </li></ul><ul><li>Organization that support the core </li></ul><ul><li>Noncore business </li></ul>
  12. 12. Untapped insights into customers <ul><li>Unrecognized segments </li></ul><ul><li>Privileged access or trust </li></ul><ul><li>Underutilized data and information </li></ul>
  13. 13. Underexploited capability <ul><li>Hidden corporate capabilities </li></ul><ul><li>Noncore capabilities in different divisions </li></ul><ul><li>Underleveraged core capabilities in different divisions </li></ul>
  14. 14. Seven steps to a new core business <ul><li>Define the core of your business. </li></ul><ul><li>Assess the core’s full potential and the durability of its key differentiation. </li></ul><ul><li>Develop a point of view about the future and define the status quo. </li></ul>
  15. 15. Seven steps to a new core business <ul><li>4. Identify the full range of options for redefining the core from the inside and from the outside. </li></ul><ul><li>5. Identify your hidden assets and ask whether they create new options or enable others. </li></ul>
  16. 16. Seven steps to a new core business <ul><li>6. Use key criteria (leadership, profit pool, repeatability, chances of implementation) in deciding which assets to employ in redefining your core. </li></ul><ul><li>7.Set up a program office to help initiate, track, and manage course corrections. </li></ul>
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