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Beyond the Core
Director 03/01/04
by Carol Kennedy

Beyond the Core Chris Zook Harvard Business School Press, €14.70

Despite its consultancy roots (Bain & Co), this book is light on jargon and addresses the short-termist strategy attacked in Having Their Cake. Its research shows that only 20 per cent of joint ventures and 30 per cent of acquisitions produce lasting shareholder value. While investors and financial markets demand more growth, the book claims this will become harder to achieve.

Zook argues that the best way to achieve sustainable growth is to expand cautiously into "adjacencies"-market areas adjoining a core business. If a company can achieve "repeatability"-applying similar processes across different markets, as Nike did and Reebok didn't-it can establish an unassailable competitive position.

Successfully pushing out the boundaries has accounted for great value-creations, while failed attempts led to 75 per cent of the 25 most costly business disasters from 1997 to 2002. The message is that growth starts with understanding what the customer wants.

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