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Preparation

Preparation. Instructions. Reminder: Print your Notes Pages now! File > Print >>>>>>>>>>>>>>>>>>>. Preparation. Icons. Preparation. Checklist. Growing Beyond Your Core Business. Preview. 5 minutes. Learning Objective.

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Preparation

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  1. Preparation Instructions Reminder: Print your Notes Pages now! File > Print >>>>>>>>>>>>>>>>>>>

  2. Preparation Icons

  3. Preparation Checklist

  4. Growing Beyond Your Core Business

  5. Preview 5 minutes

  6. Learning Objective To know six strategies to profitably expand beyond core business into adjacent markets

  7. Agenda

  8. Logistics Focused Fast Fun Flexible

  9. Participation 50 minutes

  10. Ideal Growth 5 minutes

  11. Business Growth What is a common way of growing beyond your core business? • Move into adjacent areas

  12. Success What is one method of success in expanding beyond the core? • Repeatable formula for extending strengths

  13. Generating Growth How do these repeatable formulas generate growth? • They create value in adjacent areas

  14. Benefits What are the benefits of growth through adjacency? • Reduces complexity • Increases speed • Provides strategic clarity • Learning curve advantages

  15. Pitfalls What can happen when adjacency strategies fail? • Bankruptcy • Loss of market share • Decrease in competency • Failure in core market

  16. Exercise 5 minutes

  17. Examining Ideal Growth Work as a whole group (5 min): • Discuss companies that have succeeded or failed as a result of following an adjacency strategy

  18. Strategic Adjacency Moves 5 minutes

  19. Adjacency Moves What types of adjacency moves can a company make? • Product adjacencies • Geographic adjacencies • Value chain adjacencies • Channel adjacencies • Customer adjacencies • New business adjacencies

  20. Product Adjacency What is product adjacency? • Selling new products or services to core customers

  21. Geographic Adjacency What is geographic adjacency? • Moving into a new geographic area

  22. Value Chain Adjacency What is value chain adjacency? • Moving up or down the value chain into new activities

  23. Channel Adjacency What is channel adjacency? • Moving into a new channel

  24. Customer Adjacency What is customer adjacency? • Modifying a product to enter a new customer segment

  25. New Business Adjacency What is new business adjacency? • Building a new business around a strong capability

  26. Multiple Adjacency Moves What types of multiple adjacency moves can be made? • Multiple moves in one adjacency • A series of moves across adjacencies

  27. Exercise 15 minutes

  28. Understanding Adjacency Moves Work in small groups (10 min): • Select one of the adjacency moves previously discussed • Determine how your organization could grow beyond its core business by making that adjacency move Be prepared to share your perspective with the larger group (5 min)

  29. Evaluating Adjacency Moves 10 minutes

  30. Determining Value What are the best adjacencies for your business? • Those most related to your core business • Those that build upon the strongest cores

  31. Measuring Relatedness How do you measure relatedness to the core business? • Measure economic distance

  32. Linkages How do the economic linkages affect performance? • Multiplier effect • Existing business benefits from adjacency • Adjacency benefits from existing business

  33. Evaluating Dimensions What dimensions are used to evaluate the growth investment? • Customers • Competitors • Cost structure • Channels of distribution • Singular capability

  34. Evaluating Characteristics How are these characteristics evaluated? • Identical – distance to core is 0 • Similar – estimate number of steps from core (0.25, 0.5, 0.75) • Total the number of steps (from 0 to 5)

  35. Odds of Success How are odds of success related to steps from the core? • Success declines with increased distance from core

  36. Zone of Uncertainty What is the zone of uncertainty? • 1.5 – 3.5 steps from core • Trap of false enthusiasm

  37. Success Factor What is another success factor with respect to adjacency? • Drive adjacencies toward robust profit pools

  38. Profit Pools How are profit pools evaluated? • Industry size • Current and potential profit dollars • Extent to which earnings cover capital

  39. Prism of Profit Pools What is the purpose of the prism of profit pools? • To view attractiveness of market

  40. Exercise 10 minutes

  41. Making the Evaluation Work in small groups (5 min): • Perform an evaluation of possible adjacency moves with respect to your core business Be prepared to share your perspective with the larger group (5 min)

  42. Post-script 5 minutes

  43. Summary Key Concepts Questions

  44. Understanding • Knowledge Test

  45. Transfer What will we do differently? What help do we need? How will we monitor progress?

  46. Results Business value Expected impact

  47. Reaction Overall Delivery Content Practicality

  48. Growing Beyond Your Core Business

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