Everyone wants to grow their revenues, yet companies that achieve growth often don't chase after new markets. Instead, they focus on refining a repeatable business model that leverages their existing strengths. This approach to repeatability is key to growth as it avoids the complexity that can overwhelm many organizations. The best strategy for growth is not seeking new projects but rather developing a solid Repeatable Business Model. Research indicates that simplicity, focus, and mastering continuous change are more effective than strategies involving radical change or constant reinvention. The complexity and disruption from such strategies can hinder growth, leading to cycles that may weaken a business's core. Success lies not in market choice but in a company's design and its ability to continuously improve and adapt, embedding learning and competitive advantage into its operations.
The essence of strategy lies in achieving and maintaining differentiation, which is crucial for earning money by being distinct in ways that customers value. A Great Repeatable Business Model is built on unique assets and deep competencies, the crown jewels of differentiation. It's important to keep the business model simple, focusing on what the company does well and expanding on that over time. Companies often overlook their differentiation or let it become diluted amidst daily operations. The first step in good strategy is to clearly understand what makes the company unique. Differentiation is the unique strengths that provide a competitive advantage, and strategy is about maximizing these assets and capabilities to seize the right opportunities. There are at least fifteen sources of differentiation, but the most common are superior cost economics, unique product features, and control over a key industry position. To understand a company's differentiation, one must consider how these sources work together to create a replicable business model and identify the core assets and capabilities. For instance, Singapore Airlines is known for its service levels and low-cost economy class, with both forms of differentiation reinforcing each other. To grasp the essence of differentiation, drill down to its simplest form, define it clearly, and assess its sustainability. Understanding the sources of differentiation enables a company to grow by replicating what works in the original market, across new markets, or in multicore businesses, as seen with companies like American Express, NIKE, and Procter & Gamble. Tetra Pak is an example of a company that has grown by adapting and replicating its business model, which was founded on the principle that "A package must save more than it costs." Danaher Corporation also showcases the power of repeatable business models with its Danaher Business System, which has evolved to include merger and acquisition expertise, efficient business processes, and reduced time to market. Recognizing the full potential of the core and its differentiation is vital, as failing to do so can lead to missed opportunities, unclear investment directions, and misguided business ventures.
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