Business Horizon

Business Trends

Level of business uncertainty

Competition for Resources

Price Stability in Question

Shifting Consumptions Pattern

Metaphysical Quality

A Bigger Role of Government

Age of Value

Competitive Advantage

Mass Uniqueness

Growth Horizon

• Business grows through different horizons• Every horizon represents a different stage in

the creation and development of a business:– Different business initiatives– Different management challenge

Growth Horizons

Profit

Now Time (years) Future

Horizon 1

Horizon 2

Horizon 3

Extend and defend core business

Build emerging business

Create Viable Option

Seed growth options

Replicate proven business model

Manage for profitability

Test business model

Horizon 1

• Business initiatives:– Defend core business– Generate cash, profit, and

skill as a resource for growth

Horizon 1 (2)

• Management challenge:– To shore up competitive positions– To capture what potential remains in the core

business– To continue innovation that can incrementally

extend their growth and profitability

Horizon 2

• Business initiatives:– To build emerging business that could be earning

generator– To increase revenue

Horizon 2 (2)

• Management challenge:– To take advantage before competitors do– To establish potential advantage

Horizon 3

• Business initiatives:– To explore option tomorrow business, future

opportunities

Horizon 3(2)

• Management challenge:– To develop good ideas into horizon 3– To seed numerous options business

Unhealthy Pattern

Horizon 1 2 3

1Under siege X X X

2Losing the right to grow X V V

3Running out of steam V X X

4Inventing a new future X X V

5Generating ideas but not new business V X V

6Failing to seed for the future V V X

Managing 3 Horizons

• Develop many businesses in parallel• Manage the horizons concurrently not sequently• Pay attention to:– Extend and defend today’s profit generators in

horizon 1– …while simultaneously building horizon 2 business

that will become drivers of medium term revenue growth

– …while also pursuing option in horizon 3 that will secure the company’s longer-term future

Staircases to Growth

• To sustain profitable growth, the company needs a healthy flow– Horizon 3 options flow into Horizon 2 growth

engines and ultimately into Horizon 1 core business

• Staircases to growth are one step at a time to manage risks– Market uncertainty– Capabilities gap

Staircases Architecture

• Seeding the initial growth options• Testing commercial viability the business

model• Replication and extension the business model• Managing profitability

Thank You