Roberto Lico provides advice for adjusting business strategies in a tight market. The document discusses how abundant capital in recent decades shaped corporate priorities, but today massive liquidity is chasing few opportunities, driving up valuations. Low interest rates have also reinforced a focus on growth over profitability. The document recommends that managers accept change, understand how innovation relates to growth and margins, and acknowledge that being a good partner rather than trying to dominate new platforms and ecosystems can be a more modest strategic approach. It concludes by offering a business lecture from Roberto Lico.

1. Business Consultant Roberto Lico
licoreis@licoreis.com.br
Adjusting Your Strategy in a
Tight Market

2. Roberto Lico

3. During the past two decades, corporate scope
and priorities were shaped by an abundance
of capital. Today the univested capital of
private equity funds stands at an all-time
staggering high of $3.4 trillion.
With such massive liquidity chasing few
opportunities, valuations for innovative
investments have been high.

5. The prevailing low interest rate environment
has only reinforced the focus on growth: With
debt so cheap, capital has felt able to afford
patience, and the promise of growth, even in
the absence of profitability, has been enough
to convince investors of the value of a
business.

6. Accept change, which is probably the
hardest ask. It’s important that managers
understand that the cost benefit calculus
should not compare the investment case to
the status quo. It should compare the
investment case with what inaction will entail
and this often means declining margins and
volumes, and changing customer needs.

8. Understandthe nature of the value
add of engaging with innovation. They need
to show how innovation relates to both
growth and margins.

9. Acknowledgethat rather than try to
dominate and risk over-investing as an
orchestrator in these new platforms and
ecosystems, they can also engage in a more
modest strategy of being a good partner or
complementor, and that they will need a
portfolio of thought-through propositions.

11. Contact us for a Business Lecture.
Roberto Lico – licoreis@licoreis.com.br
WhatsApp: 12 9 9195 2474