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Big Winners and Big Losers : The 4 Secrets of Long-Term Business Success and Failure by Alfie Marcus

Big Winners and Big Losers : The 4 Secrets of Long-Term Business Success and Failure by Alfie Marcus. Presented by David Keenan to the Minnesota Futurists 27 May 2005. ISBN 0131451324 Hardcover Wharton School Publishing Oct 2005, 400 pages . Author Alfred A. Marcus

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Big Winners and Big Losers : The 4 Secrets of Long-Term Business Success and Failure by Alfie Marcus

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  1. Big Winners and Big Losers : The 4 Secrets of Long-Term Business Success and Failureby Alfie Marcus Presented by David Keenan to the Minnesota Futurists 27 May 2005

  2. ISBN 0131451324 Hardcover Wharton School Publishing Oct 2005, 400 pages

  3. Author Alfred A. Marcus • BS, MS at Univ. of Chicago. Ph.D at Harvard • Edson Spencer Chair of Strategic Management and Technological Leadership at the U of M, Carlson School of Management • On Faculty since 1984. • Teaches and conducts research in strategic management, macroeconomics, business ethics, and business and the natural environment. • Visiting Professor at MIT's Sloan School of Management. Marcus is author or coeditor of 11 books • Consulted and worked with many companies including 3M, Corning, Excel Energy, General Mills, and IBM.

  4. Criteria • 10, 3, & 1-year ave. annual market return • Winners = exceed industry average • Losers = below industry average • 5-year ave. annual return • Winners = more than double the ind. ave. • Losers = less than half the ind. ave.

  5. The Population Studied • Wall Street Journal Shareholder scorecard • 1000 companies from 1992 – 2002 • 41 of 78 industry groups had “winners” or “losers” • 32 winners • $3.5 bil revenues, 14,500 employees ave. • 64 losers • $10.5 bil revenues, 48,000 employees ave.

  6. Winners Southwest Johnson Controls Harley Davidson Best Buy Alliant Tech Amphenol Ball Brown & Brown Forest Labs SPX Cabot Donaldson Losers Goodrich Delta Disney Conagra ADM Merck Readers Digest Kodak McDonalds Nordstrom Halliburton Kmart 1992 – 2002 Winners & Losers Losers • Mattel • Honeywell • Pharmacia • Saks • Snap On • Parametric • LSI Logic

  7. Another Cut - Criteria • Companies analyzed had to outperform or under perform their industries in the 6 months following Jan 1, 2002 • About half the winners and losers dropped out

  8. 9 Comparisons Sector Winner 5 yr ave annual Loser 5 yr ave annual mkt return % mkt return % Technology Amphenol 34.0 LSI Logic 3.4 Mfg/Appliance SPX 28.8 Snap-On 1.7 Software FIServ 31.2 Parametric -21.2 Food Dreyers 22.4 Campbell Soup -1.8 Drugs/Chem Forest Labs 58.5 IMC Global -18.7 Mfg/Industrial Ball 23.9 Goodyear -11.5 Fin’l/Insurance Brown&Brown 48.7 Safeco -1.0 Retail Family Dollar 36.1 Gap 9.8 Ent./Toys Activision 24.1 Hasbro -0.1

  9. Analysis Methodology • 45 analyses • 5 replicates per company pair • Groups of 6 managers compiled reports • More than 500 managers contributed • Asked to explain reasons for sustained advantage or disadvantage

  10. Report Outline • Executive Summary • why is one so much better • Brief Description of the companies • Relevant Performance • Critical competitive challenges • Key internal strengths and weaknesses • Main moves – response to challenges • Why one performed better • References

  11. Findings Exploration Necessary but not sufficient Exploitation

  12. Position Examples

  13. Movement Examples

  14. Capabilities Examples

  15. Concentration Example

  16. Agility Innovators Dilemma Christensen Why Smart Executives Fail Finkelstein Creative Destruction Foster & Kaplan Transform Your Business Godin Value Migration Slywotzky Revival of the Fitest Sull Discipline & Focus Execution Bossidy & Charan Good to Great Collins Balanced Scorecard Kaplan & Norton What Really Works Nohria & Joyce Discipline of Market Leaders Treacy & Wiersman Profits from the Core Zook Best Selling Business Books Divided Alfie says ‘Winners do both well’

  17. Implications: Manage the Tension

  18. Implications: Manage the Tension

  19. Summary Big winners: 1. Occupied sweet spots. 2. Possessed the ability to move into these spots. 3. Disciplined themselves to defend their spots. 4. Exploited and extended their positions. Big losers: 1. Occupied sour spots. 2. Were rigid. 3. Could not defend their positions. 4. Could take advantage of their positions.

  20. Discussion • Understanding the critical importance of unleashing creativity with Bill Peter • Excerpts from The Change Makers: From Carnegie to Gates, How the Great Entrepreneurs Transformed Ideas into Industries by Maury Klein 2003

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