HBR On Strategy 3 Signs It's Time to Transform Your Core Business
Sep 11, 2024
Chris Zook, a partner at Bain & Company and a bestselling author, shares insights on redefining core businesses for sustainable growth. He identifies three critical warning signs that signal a need for transformation. Zook emphasizes the importance of uncovering 'hidden assets' within organizations to fuel future growth. He draws on examples from well-known companies like General Electric and De Beers, highlighting strategies for navigating market pressures and leveraging platform capabilities for success.
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Redefining the Core
- Redefining your core business involves addressing the limitations of your current strategy or model.
- This might be necessary due to changing market conditions, new competitors, or a loss of differentiation.
Predicting Core Decline
- Most companies will only recognize the need to redefine their core business when it's too late.
- This makes it crucial to proactively identify warning signs and predict when the current growth formula will stall.
Warning Signs for Core Redefinition
- Three warning signs indicate a need to redefine your core: shifting industry profitability, attacks from superior models, and evaporating differentiation.
- Recognizing these signs can help companies adapt before it's too late.
