Disciplined Growth Strategies (eBook)

Peter Cohan is Lecturer of Strategy at Babson College. He teaches strategy and entrepreneurship to undergraduate and MBA students at Babson College. He is the founding principal of Peter S. Cohan & Associates, a management consulting and venture capital firm. He has completed over 150 growth strategy consulting projects for global technology companies and invested in seven startups – three of which were sold for over $2 billion. Peter has written 11 books and writes columns on entrepreneurship for Forbes, Inc, and Entrepreneur. Prior to starting his firm, he worked as a case team leader for Harvard Business School professor Michael Porter’s consulting firm and taught at MIT, Stanford, and the University of Hong Kong. Peter earned an MBA from Wharton, did graduate work in computer science at MIT, and holds a BS in Electrical Engineering from Swarthmore College.

Contents 6
About the Author 7
Acknowledgments 8
Introduction 9
Chapter 1: Introduction 12
Why Growing Faster Matters 13
Growth Challenge Varies by Company Size and Growth Trajectory 14
What Is a Growth Opportunity? 15
Anticipate Expiration of Current Growth Opportunities and Invest in New Ones 16
Three Myths of Corporate Growth 18
Big Companies Can’t Grow 18
My Industry Is Not Growing, So Neither Can Our Company 19
The Only Way We Can Grow Is through Acquisition 20
Growth Comes from Five Dimensions 20
Customers: Same or Different 21
Geography: Same or Different 23
Products: Same or Different 24
Capabilities: Same or Different 25
Culture: Same or Different 27
Summary 31
PartI: Exploring the Five Dimensions of Growth 32
Chapter 2: Growth via New or Current Customers 33
Defining Customer Groups 34
Principles of Growth from Current or New Customers 36
Case Studies 37
Successful: McDonald’s All-Day Breakfast 38
Introduction 38
Case Scenario 38
Case Analysis 40
Unsuccessful: Subway Shrinks by Losing Touch 40
Introduction 40
Case Scenario 40
Case Analysis 41
Successful: Criteo Penetrates the Middle Market 43
Introduction 43
Case Scenario 43
Case Analysis 44
Unsuccessful: Eastman Kodak Files for Bankruptcy 44
Introduction 44
Case Scenario 45
Case Analysis 47
Successful: Social Finance (SoFi) 49
Introduction 49
Case Scenario 49
Case Analysis 52
Unsuccessful: Homejoy 53
Introduction 53
Case Scenario 54
Case Analysis 55
Semi-Successful: Actifio One Targets $580 Billion Small and Medium-Sized Business (SMB) Market 57
Introduction 57
Case Scenario 57
Case Analysis 60
Unsuccessful: Color Labs 61
Introduction 61
Case Scenario 61
Case Analysis 63
Applying the Principles of Growth through Current or New Customers 65
Summary 65
Chapter 3: Growth via New or Current Geographies 66
Principles of Growth from Geography 67
Case Studies 68
Successful: T-Mobile Wins U.S. Customers from Rivals 70
Introduction 70
Case Scenario 70
Case Analysis 72
Unsuccessful: Avon Products Loses Share in ­Developing Countries 73
Introduction 73
Case Scenario 74
Case Analysis 75
Successful: Netflix Goes Global 77
Introduction 77
Case Scenario 78
Case Analysis 80
Unsuccessful: India Thwarts Apple’s Used iPhone Initiative 81
Introduction 81
Case Scenario 81
Case Analysis 83
Successful: MiniLuxe Expands Nationally 84
Introduction 84
Case Scenario 85
Case Analysis 87
Unsuccessful: Pacific Sunwear’s Slow Motion Wipeout 87
Introduction 87
Case Scenario 87
Case Analysis 89
Successful: Critical Software Goes International 91
Introduction 91
Case Scenario 91
Case Analysis 92
Unsuccessful: Sweden’s Rdio Loses to Spotify 93
Introduction 93
Case Scenario 93
Case Analysis 95
Applying the Principles of Growth through Geography 95
Summary 96
Chapter 4: Growth via Building or Acquiring New Products 97
Principles Of Growth from New Products 97
Case Studies 99
Successful: Amazon Creates and Dominates the Cloud 100
Introduction 100
Case Scenario 100
Case Analysis 102
Unsuccessful: ESPN’s New Programming Can’t Stop the Bleeding 103
Introduction 103
Case Scenario 103
Case Analysis 105
Successful: Facebook Earns 35-Fold Return on Instagram Acquisition in Under Three Years 106
Introduction 106
Case Scenario 107
Case Analysis 108
Unsuccessful: AOL/Time Warner Merger Destroys $228 Billion in Value over 15 Years 108
Introduction 108
Case Scenario 109
Case Analysis 111
Successful: New Relic’s Six-Year Journey from Start-Up to Public Company with Five Products 115
Introduction 115
Case Scenario 115
Case Analysis 118
Unsuccessful: Imercive Is Shuttered after Initial and New Products Fail 119
Introduction 119
Case Scenario 120
Case Analysis 121
Successful: Microsoft Acquires Seattle Computing for $75,000 123
Introduction 123
Case Scenario 123
Case Analysis 125
Successful: Localytics Acquires Splitforce 125
Introduction 125
Case Scenario 125
Case Analysis 127
Applying the Principles of Growth through New Products 128
Summary 128
Chapter 5: Growth from Current or New Capabilities 130
What Are Capabilities? 131
Principles of Growth from Capabilities 132
Case Studies 134
Successful: Apple Captures $150 Billion in Smartphone Profit 134
Introduction 134
Case Scenario 135
Case Analysis 137
Unsuccessful: After 101 Years, GM Files for Bankruptcy 139
Introduction 139
Case Scenario 140
Case Analysis 143
Successful: Netflix Transitions from DVD-by-Mail to Online Streaming 145
Introduction 145
Case Scenario 145
Case Analysis 147
Unsuccessful: News Corp. Acquires Myspace 149
Introduction 149
Case Scenario 149
Case Analysis 152
Successful: SailPoint Grows to $100 Million in Revenues through Superior Product Development 155
Introduction 155
Case Scenario 155
Case Analysis 157
Unsuccessful: Despite 100,000 Users and $1.6 Million in Capital, GoCrossCampus (GXC) Fails 159
Introduction 159
Case Scenario 159
Case Analysis 160
Successful: Five Years after Founding, Commonwealth Dairy’s New Capabilities Drive 100% Growth 162
Introduction 162
Case Scenario 162
Case Analysis 165
Unsuccessful: HealthSpot Immolates $44 Million Due to Weak Capabilities 166
Introduction 166
Case Scenario 167
Case Analysis 168
Applying the Principles of Growth through New Capabilities 169
Summary 170
Chapter 6: Growth via Culture 171
Principles of Growth from Culture 172
Case Studies 175
Successful: Intuit’s Culture of Innovation Boosts Employee Innovation and Growth 175
Introduction 175
Case Scenario 175
Case Analysis 178
Unsuccessful: IBM Bureaucratic Culture Shrinks Revenues for 17 Consecutive Quarters 179
Introduction 179
Case Scenario 180
Case Analysis 183
Successful: SimpliVity Execution Culture Propels over 100% Annual Growth 185
Introduction 185
Case Scenario 186
Case Analysis 188
Unsuccessful: Growth-at-Any-Cost Culture Collapses Zenefits 189
Introduction 189
Case Scenario 190
Case Analysis 191
Applying the Principles of Growth through Culture 192
Summary 192
PartII: Constructing Growth Trajectories 193
Chapter 7: Growth Trajectories 194
Principles of Effective Growth Trajectories 195
Case Studies 196
Success: Alexion Pharmaceuticals Grows at 44% Annual Rate from Molecule to $4 Billion along Four Growth Vectors 198
Introduction 198
Case Scenario 199
Case Analysis 202
Unsuccessful: Yahoo Grows Then Shrinks—Selling Out to Verizon for $4.8 Billion 203
Introduction 203
Case Scenario 203
Case Analysis 205
Successful: Nutanix Grows at 140% Annual Rate to Go Public Seven Years after Launch 207
Introduction 207
Case Scenario 207
Case Analysis 209
Unsuccessful: Fiksu Revenues Spike to $100 Million in 3.5 Years, and Then Implode 210
Introduction 210
Case Scenario 211
Case Analysis 213
Applying the Principles of Effective Growth Trajectories 213
Summary 214
Chapter 8: Growth Road Maps 215
Chapter 2. Road Map for Growing Faster via Customers 215
I. Diagnose Growth Strategy 217
II. Envision Growth Strategy 218
III. Execute Growth Strategy 220
Chapter 3. Road Map for Growing Faster via Geography 221
I. Diagnose Growth Strategy 221
II. Envision Growth Strategy 222
Current Geographies 222
New Geographies 223
III. Execute Growth Strategy 226
Chapter 4. Road Map for Growing Faster via New Products 226
I. Diagnose Growth Strategy 226
II. Envision Growth Strategy 228
Building New Products 228
Acquiring New Products 230
III. Execute Growth Strategy 232
Chapter 5. Road Map for Growing Faster via Capabilities 233
I. Diagnose Growth Strategy 233
II. Envision Growth Strategy 234
Current Capabilities 234
New Capabilities 236
III. Execute Growth Strategy 237
Chapter 6. Road Map for Creating a Growth Culture 237
I. Diagnose Culture 238
II. Envision Growth Culture 239
Create Growth Culture 239
Keep Growth Culture from Calcifying 240
III. Execute Growth Culture 242
Chapter 7. Road Map for Building Growth Trajectories 242
Chapter 9: Notes 244
Chapter 1: Introduction 244
Chapter 2: Growth via New or Current Customers 247
Chapter 3: Growth via New or Current Geographies 251
Chapter 4: Growth via Building or Acquiring New Products 257
Chapter 5: Growth from Current or New Capabilities 262
Chapter 6: Growth via Culture 265
Chapter 7: Growth Trajectories 267
Index 271