Beyond the Core: Expand Your Market Without Abandoning Your Roots

Perhaps you have already read Profit From the Core: Growth Strategy in the Age of Turbulence which Zook co-authored with James Allen. It was based on rigorous research which revealed the key strategic decisions that most often determine growth or stagnation in business. They note: "Central to our findings are three ideas: the concept of the core business and its boundaries; the idea that every business has a level of full-potential performance that usually exceeds what the company imagines; and the idea that performance-yield loss occurs at many levels, from strategy to leadership to organizational capabilities to execution." In the five chapters which follow, Zook (with Allen) examines "the types of strategic business decisions that most often seem to tilt the odds of future success or failure." Zook correctly suggests in this book that many organizations cannot resist the appeal ("the siren's song") of "miracle cures" of their problems. Zook focuses entirely on what has been verified in real-world experience, on what is practical, and on what will reliably achieve the desired results of sound strategic decisions.In the first chapter of this book, Zook discusses what he calls "the growth crisis" which many (most?) organizations encounter. He observes, "Finding or maintaining a source of sustained and profitable growth has become the number one concern of most CEOs. And moves that push out the boundaries of their core business into 'adjacencies' are where they are most often look these days." I agree with Zook that these strategies have three distinctive features: "First, they are of significant size, or they can lead to a sequence of related adjacency moves that generate substantial growth. Second. they build on., indeed are bolted on, a strong core business. Thus the adjacent area draws from the strength of the core and at the same time may serve to reinforce or defend that core. Third, adjacency strategies are a journey into the unknown, a true extension of the core, a pushing out of the boundaries, a step-up in risk from typical forms of organic growth." Much of the material in this brilliant book is guided and informed by what Zook claims is "the new math of profitable growth." Specifics are best provided by Zook himself.Zook presumes that those who read this book already know what a core business is, and more specifically, what the core business is of their respective organizations. Given his objectives, that assumption is probably necessary so that he can explore the opportunities which (key word) appropriate adjencies offer. Fair enough. However, my own experience suggests that companies frequently extend the boundaries of a core business without fully understanding what that core business is. Railroads probably offer the best example. Only much too late (if then) did senior-level executives at major railroads realize that their core business was transporting people and cargo, NOT "railroading." Obviously, trains are confined to the track

Chris Zook has produced his second excellent resource that is of great value to anyone who has a genuine interest in the workings of business. As a small business owner, I found this work both relevant and thought provoking.Unlike so many business books, which are heavy on anecdotes and light on research, Zook draws his conclusions based upon in-depth studies of 100 businesses and numerous interviews with CEOs. The data is concisely brought to life with understandable and practical illustrations and conclusions, of all which are aided by some very compelling charts and graphs.Beyond the Core offers a very useful framework for carefully thinking about how growth may be found and cultivated in areas outside of the core business - a virtual roadmap of business in the 21st century!

I enjoyed Chris Zook's first book, "Profit from the Core", and believe that his new book, "Beyond the Core", is also a must-read. While "Profit from the Core" eloquently described how a company could make the most of its current strengths, "Beyond the Core" may be even more relevant for a company trying to succeed in today's economy by explaining how to find new growth opportunities around a core business.Zook clearly demonstrates, through well-reasoned analysis and CEO interviews, how a company can take a core capability and apply it to new customers, geographies, products and channels. He also shows how some of the most successful companies have a repeatable formula that they apply to their adjacency expansions. The Nike, Dell, UPS and Lloyds Bank examples are particularly compelling.Zook's "Beyond the Core" provides a practical framework for identifying growth opportunities and structuring the organization for success. The book explains how the connection to a strong core business, the measurement of the profit pool, and the potential to become a leader should all play a role in deciding which adjacencies a company should pursue. I think anyone involved with helping a company create profitable growth would want to read this book. It is not surprising that THE ECONOMIST recently rated "Beyond the Core" as one of the top Economics and Business books of 2003.

If you aspire to be a CEO with dreams of expanding your company's business, or if your job involves advising your company management on M & A or expansion into adjacencies, you need to read this book. If you are already a CEO looking for insights into what makes up the core of your business strategy and how you might expand around that core while minimizing the risk to both the core and to the new venture, perhaps you should read the book and hire Zook as your consultant.Beyond the Core is written in an almost conversational style as Zook regales the reader with corporate histories of success and failure and comparisons of companies that started with similar baseline starting points. The different paths they took make intriguing reading, but this is not just some gossipy story telling. Underlying Zook's analysis of the recounting and the conclusions he draws, is some heavy-duty empirical and statistical study. Here you will find tales of Wal-Mart/Kmart and Nike/Reebok as well as of Swissair, UPS, Loral, and the obligatory dragging-in of Enron. IBM, Dell, Muzak, Gillette, and more are in Zook's compass. The book explores how companies that move into businesses related to their core operations and adjacent to that core -- hence, "adjacencies" -- can and should make decisions as to whether there is really a synergistic relationship to the core and how to assess the likelihood of success: Is the core sound? Can it support the new venture? Will the new venture drain resources and capital? What is the prospect of reaching a leadership position in the target area? Is there a relentlessly repeatable approach to replicate success?Zook focuses on expansion into adjacencies in this book but is quick to recognize that there are other growth strategies, the subject of future books, perhaps? This book is interesting not just for the sophisticated distillation of mounds of data that Zook provides, but also because of the insights into business strategy that he sprinkles throughout. It is a veritable checklist of the right questions that a CEO or advisor should ask not only before undertaking expansion but also in order to understand where things stand now.Zook's insights into how value is created for shareholders are intriguing. From the general observation that profitable growth is the wellspring of most value creation in business, he takes the reader to specific examples of how minor changes in the rate of growth or in the speed of execution, can make major changes in the rate of return. For those interested in investing in companies based on growth, a careful reading of Zook's work will provide insights for figuring out when companies are venturing too far outside their core competencies. He explains with aplomb how Muzak's attempt to use its network of transmitters and signal distribution to sell educational products and business updates was not an adjacency built on Muzak's expertise, the management of customized music. Rather, it erroneousl

Beyond the Core is Chris Zook's follow up to Profit From the Core, the crux of which is that for a company to achieve successful growth it must fully develop it's core business. Beyond the Core focuses on finding the next wave of growth through "adjacent" moves, and illustrates its thesis with a series of colorful and engaging examples. Beyond the Core is down to earth business thinking without unnecessary pomp and circumstance, and ultimately delivers a satisfying business growth philosophy.