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Staircases to
Growth
McKINSEY Strategy & Growth
Agenda
• Staircase of Initiatives & Opportunity
• Assembling Platforms of capabilities
• Leading Growth
o Concurrent manag...
Staircase of Initiatives
• Many low-growth company are slaves to process for
projecting a medium term budget
• Successful ...
Coca Cola Amatil’s staircase
The Opportunity Pipeline
1. Maximizing existing customer
2. Attracting new customer
3. Innovation of product and services
...
7. Stepping
out into new
business
arenas
6.
Geographical
Expansion
5. Improving
industry
structure
4. Innovation
of value-...
Assembling platforms of capabilities
• To emphasize the
importance of the skills
inherent in an organization's
people and ...
Business-specific Competences
• DISNEY – led in industry since 1928, the first Mickey Mouse
cartoon, Steamboat Willie
Tran...
Growth-enabling skills
• Focusing on
core competences
• Distinguished by their
mastery of more generic
"growth-enabling,"
...
Privileged assets.
To be valuable , bring competitive advantage
• Brands : Disney
• Networks
• infrastructure
• Informatio...
Special relationships
Relationships are one of great growers' most important
• SAP's products requires technical expertise...
Breaking constraints by assembling new capabilities
• Flexibility to cut short unsuccessful and step to attractive
feature...
Flexible evolution of a business
• “Stick to the knitting”
and “Focus on core
competences”
are prescriptions that
require ...
Time
Value
Horizon 3
Create viable
options
Horizon 2
Build emerging
businesses
Horizon 1
Extend and defend
core businesses...
3 Horizons of growth
Horizon 1
Extend and defend
core businesses
Horizon 2
Build emerging
businesses
Horizon 3
Create viab...
Leading Growth
• Only 10 percent of companies with above-average
growth will sustain it for more than ten years.
• A sound...
Reason for failure
• Many management teams do not integrate and balance the
inspirational, strategic, and organizational i...
Leadership across three
dimensions of growth
1.Commit to growth
2.Build growth engines
3.Cultivate entrepreneuship
2.And w...
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Staircases to Growth

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A case study from CMMU class.

Published in: Business

Staircases to Growth

  1. 1. Staircases to Growth McKINSEY Strategy & Growth
  2. 2. Agenda • Staircase of Initiatives & Opportunity • Assembling Platforms of capabilities • Leading Growth o Concurrent management across 3 Horizons o Staircases to Growth • 1. Build new capabilities • 2. Adapt business model • 3. Protect the venture
  3. 3. Staircase of Initiatives • Many low-growth company are slaves to process for projecting a medium term budget • Successful growers emphasizes both short term and long term Vision and Tactics • They plan within a clear strategy • Short term steps take advantage to o build new skills, when new opportunities is open up, they are able to move faster than competitors
  4. 4. Coca Cola Amatil’s staircase
  5. 5. The Opportunity Pipeline 1. Maximizing existing customer 2. Attracting new customer 3. Innovation of product and services 4. Innovation of value-delivery system 5. Improving industry structure 6. Geographical Expansion 7. Stepping out into new business arenas
  6. 6. 7. Stepping out into new business arenas 6. Geographical Expansion 5. Improving industry structure 4. Innovation of value- delivery system 3. Innovation of product and services 2. Attracting new customer 1. Maximizing existing customer Disney’s : 7 Degrees of Strategic Freedom Teenage & Adult - Home Video - Games - Theme parks Television – Wonderful World of Disney Expand theme park Promotional Relationship with Macdonald’s and Mattel -Live Entertainment (Theater and Sport) -Cruise Liners -Resort -Television ABC
  7. 7. Assembling platforms of capabilities • To emphasize the importance of the skills inherent in an organization's people and processes • Perspectives of growth opportunities Focus to "skills-based strategy" and "the core competence of the corporation“ • The important how to use capabilities to grow tends to be narrow and may reinforce managers' perception that they are hindered by having limited capabilities.
  8. 8. Business-specific Competences • DISNEY – led in industry since 1928, the first Mickey Mouse cartoon, Steamboat Willie Transformation
  9. 9. Growth-enabling skills • Focusing on core competences • Distinguished by their mastery of more generic "growth-enabling," skills, including making : acquisitions financing, risk management and deal structuring, regulatory management, capital productivity enhancement.
  10. 10. Privileged assets. To be valuable , bring competitive advantage • Brands : Disney • Networks • infrastructure • Information : databases of customers , information-based marketing company as credit card • people skills : petroleum • knowledge-based assets • company processes.
  11. 11. Special relationships Relationships are one of great growers' most important • SAP's products requires technical expertise at every stage of implementation at growth formula by uses partnerships • Hardware that runs its software to sell the product and provide technical support (IBM, Compaq, Bull, or NEC,) • Systems consultants with the software developers that provide complementary business- worldwide standard in integrated business software (Price Waterhouse, Andersen Consulting, or Ernst & Young)
  12. 12. Breaking constraints by assembling new capabilities • Flexibility to cut short unsuccessful and step to attractive features of staircase approach • A company not need to strengths in all area of business, just areas important to make money.
  13. 13. Flexible evolution of a business • “Stick to the knitting” and “Focus on core competences” are prescriptions that require careful interpretation as record of Disney’s evolution.
  14. 14. Time Value Horizon 3 Create viable options Horizon 2 Build emerging businesses Horizon 1 Extend and defend core businesses Concurrent management 3 Horizons
  15. 15. 3 Horizons of growth Horizon 1 Extend and defend core businesses Horizon 2 Build emerging businesses Horizon 3 Create viable options Types of businesses Core businesses underpinning current profitability New businesses and extensions of existing businesses fuelling revenue growth Options to build future businesses Management imperative Unlock incremental growth, then manage for value as the business declines Exercise options, assemble required capabilities, and drive business-building initiatives Source options (ideas, relationships, assets) for future growth and test viability of business concepts Primary focus Bottom-line performance and profitability Top-line growth and capital efficiency Future potential and robustness across multiple scenarios
  16. 16. Leading Growth • Only 10 percent of companies with above-average growth will sustain it for more than ten years. • A sound growth strategy is important. But it is a long way from a successful growth program. 1.Why do so few growth programs succeed ? 2.And what can leaders do to change the odds in their favor?
  17. 17. Reason for failure • Many management teams do not integrate and balance the inspirational, strategic, and organizational imperatives of growth. Some executives begin in the wrong place. • Executives find it difficult to concurrently manage initiatives with different pay-off horizons 1.Why do so few growth programs succeed ?
  18. 18. Leadership across three dimensions of growth 1.Commit to growth 2.Build growth engines 3.Cultivate entrepreneuship 2.And what can leaders do to change the odds in their favor ?

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