Growth

Growth

Helping companies determine where to compete, using a fine-grained approach to identify opportunities for growth

What are the sources of corporate growth? According to our analysis of more than 750 companies around the world, a large company’s top-line growth is driven mainly by market growth in the subsectors and product categories where it competes and by the revenues obtained from acquiring other companies. Surprisingly, a third source of growth, the gain or loss of market share, explains only around 20 percent of the difference in the growth performance of companies. These findings suggest that executives ought to complement the traditional focus on execution and market share with more attention to where a company is—and should be—competing.

Our approach: Granularity of growth

We help companies identify where to compete and support them as they design and execute strategies to capture those growth opportunities. In analyzing opportunities, we have found that applying broad terms such as “growth industry” and “mature industry,” while time honored and convenient, can prove imprecise or even downright wrong. Many so-called growth industries…, include segments that are not growing at all. At the same time, industries that most consider mature, such as consumer goods, often have segments that are growing rapidly. In many cases, perspectives on growth are created by averaging out the different growth rates in an industry’s segments and subsegments, which creates a misleading view of growth prospects.

Using various tools and databases , we help our clients “de-average” their view of markets and develop a more detailed, or “granular,” perspective on trends, future growth rates, and market structures. After helping companies identify where to compete, we support them as they execute their growth strategies. We help our clients define the capabilities they must build to win, create business plans, allocate resources, mobilize talent, and track their progress.

Tools and databases

A robust set of capabilities and tools to help companies decide where to compete.

The market matrix analyzes a client’s portfolio of businesses throughout geographic, customer, and product segments, quickly revealing where it is under- and overinvesting in growth opportunities.

Recent examples of our work

  • We helped a European pulp-and-paper converting company identify a new business in which it could invest its cash holdings. We helped identify several new opportunities aligned with the client’s capabilities (for example, engineering expertise, manufacturing floor plate, printing) and then helped define an entry strategy for those areas. The board adopted the recommendations and allocated the required capital.