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When Your Business Needs a Second Growth Engine
Summary
This article discusses the importance of companies finding their next wave of growth by building a second core, often referred to as an engine two. Many companies have experienced stagnated or stalled growth due to technological disruption, making it increasingly imperative to find new ways of creating growth. Successful engine twos typically target markets with sizable and growing profit pools, leverage a competitive advantage, adopt entrepreneurial approaches, and use the scale and assets of the original core. By combining these four elements, companies can create businesses with much greater potential than their original core.
Q&As
What is the most reliable way for a firm to find its next wave of growth?
The most reliable way for a firm to find its next wave of growth is to apply the capabilities of its core business in an adjacent market.
What are the four factors common among successful engine twos?
The four factors common among successful engine twos are targeting markets with a sizable and growing or shifting profit pool, having a differentiated competitive advantage, adopting entrepreneurial approaches, and leveraging the scale and assets of the original core.
What do most CEOs predict will be the main source of value creation in the next decade?
Most CEOs predict that 40% of the value their companies create will come from entering new markets and launching new business models in the next decade.
How does technology continue to disrupt industries and shorten the lives of corporations?
Technology continues to disrupt industries and shorten the lives of corporations by upending industries and wiping out businesses at a remarkable rate.
What are the three main ways firms can create an engine two?
The three main ways firms can create an engine two are entering a fast-growing adjacency, creating a next-generation version of the core business, and building or buying a business totally separate from the core.
AI Comments
👍 This article provides a great overview of how businesses can successfully find their next growth engine.
👎 This article is too long and doesn't provide enough practical advice for businesses looking to grow.
AI Discussion
Me: The article talks about how businesses can create a second growth engine when their current one is struggling. It details four steps that successful engine twos have in common, such as targeting markets with growing profit pools, having a differentiated competitive advantage, being entrepreneurial, and leveraging the scale and assets of the original core.
Friend: Interesting. That's timely, as more and more companies are struggling due to the pandemic and technological disruption. What are the implications of this article?
Me: Well, the implications are that companies need to be proactive in finding their next wave of growth. The article emphasizes the importance of identifying markets with expanding profit pools, ensuring that their offerings are differentiated, embracing an entrepreneurial mindset, and leveraging the original core's skills and assets. It also suggests that businesses should be open to entering new markets and launching new business models, which can be a great way to stay ahead of potential competition.
Action items
- Research potential markets that have a sizable and growing profit pool.
- Identify ways to differentiate your offering from competitors.
- Develop an entrepreneurial mindset and leverage the skills and assets of the original core business.
Technical terms
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- Adjacency
- A market or industry that is related to or adjacent to a company’s core business.
- Differentiated
- A product or service that is unique or distinct from its competitors.
- Entrepreneurial
- A mindset or approach that is characterized by risk-taking, innovation, and creativity.
- Leverage
- To use a resource or asset to its fullest potential.
- Magnify
- To increase or amplify the effect of something.