Profit From the Core : Growth Strategy in an Era of Turbulence

Based on a sweeping ten-year study of more than two thousand technology, service, and product companies in a variety of industries, Profit from the Core argues that most growth strategies fail to deliver value-or even destroy it-primarily because they wrongly diversify from the core business. The authors contend that this timeless strategic precept-building market power in a well-defined core-remains the key source of competitive advantage and the most viable platform for successful expansion.

Drawing from hundreds of in-depth case studies, interviews with more than one hundred CEOs, and the authors' broad consulting and business experience, the book identifies and explains three key factors that differentiate growth strategies that succeed from those that fail: (1) reaching full potential in the core business; (2) expanding into logical adjacent businesses surrounding that core; and (3) preemptively redefining the core business in response to market turbulence.

The authors identify the classic problems that incumbents encounter in each of these areas and-borrowing lessons from private equity and start-up ventures-explain how to resolve them in today's rapidly changing business environment. The book concludes with guidelines for how companies can become sustained value creators-capable of successfully refining and revamping the core business over time.

Identifying enduring, often counterintuitive principles that fly in the face of new economy hype, Profit from the Core is an indispensable strategic guide to achieving long-term, profitable growth in any business.

Amazon.com Review
Spawned by a 10-year study of 2,000 firms conducted at Bain & Company, a global consultancy specializing in business strategy, Profit from the Core is based on the fundamental but oft-ignored maxim that prolonged corporate growth is most profitably achieved by concentrating on a single core business. To help companies identify this true essence, narrow their focus accordingly, and move forward in a manner that builds upon existing structure, Bain director Chris Zook and former Bain director James Allen present "a set of practical and proven principles, diagnostic tests, and questions for management teams to use as tools for reexamining or revising their strategies in search of the next wave of profitable growth." Bolstering their argument with real-world examples--including companies such as Disney, which succeeded by taking this approach, and Bausch & Lomb, which faltered by eschewing it--the authors show how to effectively uncover true corporate strengths, elevate them to realize their potential, identify related new businesses that could be successfully added, and even completely redefine a core when confronted with factors forcing such action. (For example: they offer a step-by-step method for mapping "adjacent opportunities" that may prove complementary, ranking them according to potential, and developing strategies to further evaluate and ultimately implement them.) The result is recommended for anyone tired of the management theory du jour who seeks a proven way to propel their company into the future. --Howard Rothman

---

All Customer Reviews
Average Customer Review:
0 of 0 people found the following review helpful:

Compelling guide to management, 2008-07-16
This book is a classic in the genre of popular business strategy. Chris Zook and James Allen outline a compelling case for focusing your company on one or two core businesses, and expanding - with discipline - from that core into adjacent businesses. They base their prescription on a 10-year study of more than 2,000 companies. Their presentation is clear and logical; it sweeps the reader along. However, just as you are nodding your assent at some clearly established point, the authors cite Enron or WorldCom as examples of firms that are doing things right. Such is the danger that even solid classics endure as the years pass. These examples have not endured the test of time, which affects their utility but does not dilute this book's position as an early innovator. Written when the Internet stock bubble was at its most expansive, the book reflects some of that market's wide-eyed euphoria about technology. Yet getAbstract finds that the authors make some good, memorable - even lasting - points. They position the phrase "core business" in the vocabulary of commerce, and explain what it means and what context it connotes. However anachronistic some of their examples may have become, their analysis retains value as a touchstone for strategists.


1 of 1 people found the following review helpful:

Define your core business clearly, 2006-02-21
The authors of this book see 3 essential elements separating a good growth strategy, one that is successful from a poor growth strategy, one that fails:
· The company must reach its full potential in its core business or businesses.
· Once a company has reached its potential in its core business, it must then expand to the logical businesses that surround the core business.
· A company must preemptively redefine its core business in response to the first signs of changes in the marketplace.

The foundation of sustained growth, according to these authors, rests in establishing a strong foundation: a clear definition of the company's core business. The authors present a series of ten questions designed to aid businesses in defining their core business clearly.
There are pitfalls along the way, and the authors present several growth pitfalls to avoid:
· Expanding toward an entrenched position, where the company has relatively low odds of achieving leadership
· Overestimating the profit pool.
· "False Bundling"- trying to be all things to all customers.
· Invaders from unexpected fronts.
In order to deal with market changes, the authors offer five key changes that are most threatening to a company's growth:
· Erosion of low-end product segments.
· Erosion of customer segments.
· Erosion of micro-segments.
· Erosion of traditional business boundaries.
· New intermediaries and new control points.


3 of 3 people found the following review helpful:

Skip this one and read the sequel instead, 2005-03-28
This is not a terrible book- it has some interesting case studies which the authors use to prove their points. However, there is not a great deal in here that is new if you've read the sequel to this book first ("Beyond the Core", Zook), and have read other

There are some good points about this book. I like the parts about defining the business boundaries, mapping adjacencies, reacting to competitor threats, etc. However, I feel that I got a lot more out of the sequel than from this book. Perhaps I would have rated it higher if I read it first, or if I hadn't already read so many books on this theme. Surely Zook and Allen should not pay the price for this, so I have factored this in to my score.

Additionally, I suppose I can't blame them for writing highly of Enron and even using them as an example of successful "redefinition of the core"- everyone was fooled, although you think that the top consulting firm in Boston would have become suspicious, considering the great fall it sustained shortly afterward. Perhaps the sequel served in part to correct this mistake.

This book was premature; it would have been best to combine this with the sequel into one book. If you skip this and read only the latter, you won't be missing much.


0 of 0 people found the following review helpful:

Very Realistic and very useful, 2003-12-11
This book is very good, it explains very clearly the different growth concepts with clear definitions, and a very interesting growth matrix. in addition, unlike other books, this book uses a lot of real world examples to illustarte the different concepts and growth startegies. It explains how companies, that succeded, evolved from their core business and developed new products without getting lost in the process. Also, explains why and how some companies failed. The book is realistic, and gives you some tools and matrix that you can apply when analyzing and developing a growth strategy. You should also check out the web site, it has some examples of how to apply the gowth matrix.


0 of 0 people found the following review helpful:

Dell has applied this book idea very well, 2003-11-10
This is a very good book for anyone interest in business strategy. Especially reading it with Creative Destruction. One company which has applied this strategy very well is Dell. Its strategy to stay at the core in PC while adjaceny expansion into Printer, PDA ... etc. It stated in Businessweek that it is entering into the low-end (maybe ignorant by market leader) market for market share first. It is similar to a point mentioned in the book. I guess it has a lot to do with Rollin (one of the head of Dell)

Price is accurate as of the date/time indicated. Prices and product availability are subject to change. Any price displayed on the Amazon website at the time of purchase will govern the sale of this product.