4 Principles Of Enduring Success

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4 Principles Of Enduring Success

  1. 1. 4 Principles of Enduring Success Muhammad Usman
  2. 2. Our Goal <ul><li>Our Goal is to understand why some of the have managed to perform at very high level over very long periods of time. </li></ul>
  3. 3. Project in Brief <ul><li>40 Companies </li></ul><ul><li>Stock exchange, financial data bases, libraries, corporate archives. </li></ul><ul><li>Out of 40, 9 companies perform well. </li></ul><ul><li>Interviews the financial analysist. </li></ul>
  4. 4. 4 Principles <ul><li>Exploit before you Explore </li></ul><ul><li>Diversify you Business Portfolio </li></ul><ul><li>Remember your Mistakes </li></ul><ul><li>Be Conservative about Change </li></ul>
  5. 5. Exploit Before You Explore <ul><li>Great companies emphasized on exploiting existing assets over exploring new ones. </li></ul><ul><li>For Exploration: We take R&D spending and patent issued as percentages of sales. </li></ul><ul><li>For Exploitation: We use return on equity, return on sales and return on investment. </li></ul>
  6. 6. Cont… <ul><li>Gold Medalist Companies mostly pursue exploitation rather than exploration. </li></ul><ul><li>Great companies don’t innovate their own way to growth they exploit the fullest of existing innovations. </li></ul>
  7. 7. Diversify Your Business <ul><li>Diversification works only if diversifying company can exploit economies of scope by combining related business. </li></ul><ul><li>Corporation need diversification to reduce the impact of dips in economic cycle. </li></ul><ul><li>Geographical diversification is important for product range </li></ul><ul><li>Supply chain diversification also matters. </li></ul><ul><li>Single business firm perform well in short run </li></ul>
  8. 8. Remember Your Mistakes <ul><li>What really separates the great from the good is that the great companies also remember their mistakes. </li></ul><ul><li>Great Companies do not all into the sape trap </li></ul>
  9. 9. Be Conservative About Change <ul><li>Creative Destruction is the only way to survive in modern capitalism. </li></ul><ul><li>Change is inevitable, and its better to lead than follow it. </li></ul><ul><li>Great Companies do changes only in selective moments. </li></ul><ul><li>Jumping onto every management wave is not for them </li></ul>

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