Sunday, July 6, 2008

Evaluating a Company's Core Business

Finding Your Next CORE Business.
By: Zook, Chris,
Harvard Business Review,
April 2007, Vol. 85, Issue 4

Company after company prematurely abandons its core in the pursuit of some hot market or sexy new idea, only to see the error of its ways – often when it's too late to reverse course.

And yet it's also true that no core endures forever. Sticking with an eroding core for too long, as Polaroid did, can be just as devastating.

What we've discovered is that it is possible to measure the vitality remaining in a business's core – to see whether that core is truly exhausted or still has legs.

The exhibit "Evaluate Your Core Business" offers a tool for doing so.

What is the state of our core customers?

What is the state of our core differentiation?

What is the state of our industry's profit pools?

What is the state of our core capabilities?

What is the state of our culture and organization?

Chris Zook is the author of Unstoppable: Finding Hidden Assets to Renew the Core and Fuel Profitable Growth (to be published next month by Harvard Business School Press), from which this article is adapted. Based in Amsterdam, he leads the Global Strategy Practice of Bain & Company.

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