Harvard Business Review, Top-line Growth

BR0407_cI picked up the July/August edition of HBR because it was a double issue on Growth. Normally, HBR articles are interesting, but very high-level concepts that are difficult to actually use. This particular edition offers more granular information including formulae for determining budget allocations when marketing (retention rates vs. customer acquisition) and how this ties into the NPV of the customer.

There are several articles that I thought were practical. There actually are ideas regarding where real competitive advantage can be gain: focus on customer profitability, product configuration through value curves (and how one offers exponential value), the dilemma of when to acquire or form an alliance, and profitability through price discrimination (bundling), among others.

One flawed concept, in my opinion, was in Geoffrey Moore’s “Darwin and the Demon”. Moore is famous for his book “Crossing the Chasm” and the stages a new technology product goes through. He has further developed this concept to include the full product life cycle (Early Market, The Chasm, Bowing Alley, Tornado, Main Street (Early), Main Street (Mature), Main Street (Declining), Fault Line!, End of Life) and proceeds to explain the competencies and types of management needed for a company to go through each stage successfully.

The problem is that the same company that develops a technology early on is not the same company that brings it to wide markets. There is a sufficient amount of empirical data in The Art of Scale to suggest this is the case (and common sense tells you this as well). The commercialization shifts to organizations that are fully aware of how to market these products and have the correct management and resources in place to do so. Assuming that just one company will take a technology through the entire life-cycle is unrealistic in 95% of the cases.

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