The Analysis Of The Five Trilogy Of The Decline And Fall Of Enterprises

< p > < strong > first step: enterprise success < /strong > /p >

< p > a young company uses an emergency strategy process to find a successful solution, and then launches the first product to help customers accomplish an important job better than their competitors.

As the winning strategy surfaced, the management team eliminated the emergency process from the strategy formulation process and carefully focused all investment priorities on this opportunity.

Any behavior that may shift resources out of the growing core business will be firmly deterred.

This concentration is the basic requirement for success at this stage.

However, this means that when the core business is still in the stage of vigorous development, the new growth business will not start.

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< p > if we grasp the key points, we will make the enterprises ahead of the less competitive and less focused competitors in the track of sustainable development.

Because the profits in the < a href= "http://www.91se91.com/news/index_h.asp" > high-end market < /a > are very attractive, when enterprises begin to lose the goods in the low end market which are restricted by goods and become goods, they are almost unaware of the profits.

It is generally good to withdraw from the market of the lowest profit product and enter the higher end product market on the track of continuous development, because the gross profit margin of the whole enterprise has been raised.

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< p > < strong > second steps: enterprises are facing growth gap < /strong > /p >

P > despite the success of the business, executives quickly realized that they were facing a growth gap.

This is due to the tendency of investors in Wall Street to incorporate the expected growth into the stock's current value and to achieve the market share gains by expected growth.

To increase the share price of the company above the market average, the manager only makes the growth rate of the enterprise exceed that of the investor at the current price level.

Therefore, managers who are committed to creating shareholder value always face growth gap, that is, the gap between the expected growth rate and the growth rate needed to achieve the above average return rate.

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< p > < strong > third steps: good investment can not wait to grow. < /strong > /p >

< p > when the enterprise is facing a huge growth gap, its values, that is, the criteria for approving projects in the resource allocation process, will change.

No project that can fill the gap and expand quickly can not allocate resources in the strategic process.

The process of creating new growth businesses is eliminated here.

When the investment capital of enterprises is eager to pursue growth, good money will turn into bad money, because this will cause a series of inevitable wrong decisions.

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< p > innovators seek funding for destructive innovation, hoping to provide fuel for enterprise growth and bring high a href= "http://www.91se91.com/business/" > profit < /a >, but at the same time, it is found that due to the development is not fast enough, not enough, the balloons they released to explore the road have been exploded.

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< p > < strong > fourth steps: executives temporarily tolerate losses < /strong > < /p >

"P" is starting to become clear. Competition in a large and visible consumer market is an expensive challenge, because if a customer wants to buy a product, the product must be better than the product that the customer is using.

The whole team reminded executives that if you want to get the first pot of gold, you must bear huge losses first.

Executives are determined to start from the long-term interests of enterprises, so they accept the fact that business will suffer huge losses for quite some time, so they have no way to retreat.

Executives have persuaded themselves to inject money into growth and ultimately bring about growth, as if there is a linear relationship between them, as if the more active you invest in new business, the quicker the new business will start.

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< p > in order to match the budget timetable, launch products on time and put into operation a lot, managers will plan the cost structure before they get the revenue, and the cost will be huge as they must get high income as soon as possible.

But too much investment will jeopardize the healthy development of a new business, because the heavy expenditure level in turn determines the type of customer, and whether the market can generate enough income to cover these costs.

If this happens, the consumers of emerging market will prefer the simple products.

In short, the ideal customer of disruptive investment is bound to be unattractive to enterprises.

The ideal channel, that is, the need for money to promote its own destructive growth in the market, to combat competitors, has become unattractive.

It seems that only the largest channel to reach the most populous market can bring enough income quickly.

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< p > this has pformed the nature of the enterprise's capital.

Good money turns into bad money: eager to see business development and endure profits stagnation.

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< p > < strong > fifth steps: rising losses lead to reduction of funds < /strong > /p >

< p > when project managers try to win through competition in the conventional consumer market, they find that customers are willing to continue buying products that they have always trusted, and there are many reasons behind this.

Basically, it can be attributed to the interaction relationship we discussed in the fifth chapter.

Disruptive continuity innovations rarely enter the existing market.

Usually, to make the customer benefit from the new product, a lot of unexpected changes are needed.

Although the income is not improving, the cost of the budget is not decreasing.

Losses have increased and stock prices have been hit hard again, when investors rediscover their expectations of growth.

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< p > the new management team will be put in place immediately to save the heavily damaged stock prices.

In order to stop the loss of funds, the new team stopped all expenditures other than the cost of maintaining core business vitality.

It is good news to re-establish ourselves in the < a href= "http://www.91se91.com/pioneer/" > core business < /a >, which is a trial and error criterion for promoting the progress of business performance, because the resources, processes and values of the enterprise are all served for this task.

Stock prices react with bounce, but as long as the new share price completely digests the growth potential of the core business, the new executives recognize that they must continue to invest in order to grow.

But now enterprises are facing a bigger gap of growth.

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< p > the situation returns to the third step again, that is, the enterprise needs to develop faster and larger innovation business.

This pressure causes the management to repeat the tragic wrong decision until many values begin to lose, and the enterprise is finally acquired by other enterprises, and the acquirer itself promotes development through disruptive business, but regards the acquisition as a collaborative opportunity to reduce costs.

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