BUSINESS GROWTH MODELS

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drjohn11a
Dr. John Psarouthakis,
Executive Editor of www.BusinessThinker.com,   publisher of www.GavdosPress.com and Founder and former CEO, JP Industries, Inc., a Fortune 500 industrial corporation.

 

This is a brief summary of a seminar on Business Growth given in several gatherings both in the USA and Europe.

In the world of business nothing ever stays the same. Today’s competitive advantage may be copied by competitors and rendered useless tomorrow. Developing new products and entering new markets are two ways to maintain a competitive edge. But in a fast-paced market, imitators can often quickly follow : even patented items are difficult to defend in a global market. The globalization of commerce has stimulated a shift in thinking about competitive advantage. In many industries a competitive position can come from underlined organizational abilities, in others it could come up from a strategy model of financing, acquisitions, licensing, geographic expansion, or a mathematical model that enables you to integrate several of the above components of growth.

Learning Objectives:

In this seminar and workshop we  dealt with the Dynamic Management Model (DMM) in developing growth action plans and the dynamic management of these action plans. In addition we dealt with several other models, such as growth by relevant acquisitions, geographic expansion, financial models for growth, and others. All these models will be integrated into DMM that would provide the modem for managing the profitable growth process.

Approach:

A business can be considered as a dynamic organism that reacts or acts on its environment in accordance to preset but also changing parameters that effect its performance in direct relation to the simulation and controls incorporated in it. Being a dynamic organism / system it also means that its overall performance is a multiplicative function and not a summation function as it has been considered by classical growth models. These multiplicative functional relationships will be a significant part of the content of this seminar / workshop.

Briefly the performance of a business can be express as follows:

P=F[(aA)(bB)(cC)……..(xX)],

where the letters a,b,c,………x simply refer to the importance or proportional weight factors of each function and the letters A,B,C,……………X refer to the level of performance of the company for each function in the growth plan.

I built a Fortune 500 industrial corporation in a relatively short time and  taught these experiences at the Ross School of Business of the University of Michigan and have authored one and co-authored another book relating to these matters.

View your company as a powerful tool used to realize your vision and objectives. But realize that it is also bound by certain natural laws such as entropy. To minimize entropy, you must develop a reliable and effective input-transformation-output (I-T-O) dynamic cycle for your company. Also you must understand that your company is a part of a dynamic network, affected by multiple layers of people, groups, organizations, societies, and global forces all interacting dynamically and, at times, unpredictably with one another.

To survive, grow, and remain profitable, your company must develop an effective business model with the relevant strategy and action plan at a specific point in time for several functions / issues, regardless of your company’s stage of development (infancy or maturity) or its market niche. And remember that the performance of the company is a multiplicative result of those functions / issues.

 

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