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Planning for Growth:   Building the Business in Core Adjacencies Concepts from the book Beyond the Core by Chris Zook Presented by Kevan Woodson ActionCOACH
New Products   Adjacencies  or Opportunities  can assume many  forms  New Markets What is an Adjacency? New Customers New Channels New Value Chain Activities
New Products that Address Different Customer Needs Than Needs Addressed in the Core   New to the World   I-Pod Evista – a new drug Plastic Asphalt PC Variations of  Existing Products I-Touch Viagra Ceramics Coal Tar  Kindle What is an Adjacency?
New Markets Relative  to Core Markets  New Geographies   Wal-Mart in China IKEA in the US Guiness in the US UPS Domestic China Service New Industries  /Applications  PC Repair by Fedex Real Estate by McD Fast Food by Pepsi Clothing by Harley What is an Adjacency?
New Customers Relative  to Core Markets  B2C  Haines Underwear  for women Microsoft OS for less affluent  consumers Yoplait Yogurt for kids B2B  Ingersoll Rand servicing  competitors’ products Southwest Airlines  hauling freight  What is an Adjacency?
New Channels Relative  to Core Markets  Indirect   New Channel Partners (IBM PCs in China)  What is an Adjacency? Indirect - Internet   Shop online at  BestBuy and Walmart Direct Dell.com or Own Sales Force
New Value Chain Steps Relative  to Core Markets  Backward Integration   Wal-Mart growing  its own organic cotton  What is an Adjacency? Forward Integration   Dell Computers  offered in retailers
[object Object],[object Object],Core Business Close Adjacencies Midrange Adjacencies Distant Adjacencies Our Present Businesses Future Businesses
10 20 30 40 50 Equipment  Sales   Installation   Share of Revenue in US Portable Air Power Industry ( 2005)  Operating Margin 0% 100% The Case of Equipment Sales Parts & Service  Integration & Consulting  $ Growth Rate Per Annum   Identifying Viable Adjacent Opportunities Where do you want to grow?
[object Object],[object Object],Core Business Close Adjacencies Midrange Adjacencies Distant Adjacencies 37% 28% <10% Growth Rule The closer to a successful Core the greater probability of success in the Adjacency.  Success Rates for Adjacency Moves
[object Object],Leveraging the Core Business  The Case of Nike: The Good News Nike’s Core was Athletic Shoes   Golf Shoes   Golf Apparel  Golf Balls  Golf Clubs  Processes: #1: Knowledge of Customer Needs – performance and brand  #2: Knowledge of Channels - Used sporting goods shops not golf shops to reach market #3: Knowledge of Marketing Communications - Used celebrity endorsers - Tiger   Woods & other tournament winners
[object Object],The Case of Reebok: The Bad News Reebok's Core was Athletic Shoes   Boat company Reebok's Core was Athletic Shoes   Polo footwear Reebok’s adjacency moves  did not  leverage processes or knowledge in the athletic shoe business.  Leveraging the Core Business
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Planning for Growth: Tasks Sub-tasks/Questions
Marketing  Communications Channels Offering  Pricing Marketing/Business Strategy  Develop Strategies to Exploit/Realize the Key Opportunities

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Planning For Growth Action Coach

  • 1. Planning for Growth: Building the Business in Core Adjacencies Concepts from the book Beyond the Core by Chris Zook Presented by Kevan Woodson ActionCOACH
  • 2. New Products Adjacencies or Opportunities can assume many forms New Markets What is an Adjacency? New Customers New Channels New Value Chain Activities
  • 3. New Products that Address Different Customer Needs Than Needs Addressed in the Core New to the World I-Pod Evista – a new drug Plastic Asphalt PC Variations of Existing Products I-Touch Viagra Ceramics Coal Tar Kindle What is an Adjacency?
  • 4. New Markets Relative to Core Markets New Geographies Wal-Mart in China IKEA in the US Guiness in the US UPS Domestic China Service New Industries /Applications PC Repair by Fedex Real Estate by McD Fast Food by Pepsi Clothing by Harley What is an Adjacency?
  • 5. New Customers Relative to Core Markets B2C Haines Underwear for women Microsoft OS for less affluent consumers Yoplait Yogurt for kids B2B Ingersoll Rand servicing competitors’ products Southwest Airlines hauling freight What is an Adjacency?
  • 6. New Channels Relative to Core Markets Indirect New Channel Partners (IBM PCs in China) What is an Adjacency? Indirect - Internet Shop online at BestBuy and Walmart Direct Dell.com or Own Sales Force
  • 7. New Value Chain Steps Relative to Core Markets Backward Integration Wal-Mart growing its own organic cotton What is an Adjacency? Forward Integration Dell Computers offered in retailers
  • 8.
  • 9. 10 20 30 40 50 Equipment Sales Installation Share of Revenue in US Portable Air Power Industry ( 2005) Operating Margin 0% 100% The Case of Equipment Sales Parts & Service Integration & Consulting $ Growth Rate Per Annum Identifying Viable Adjacent Opportunities Where do you want to grow?
  • 10.
  • 11.
  • 12.
  • 13.
  • 14. Marketing Communications Channels Offering Pricing Marketing/Business Strategy Develop Strategies to Exploit/Realize the Key Opportunities