Kirby when growth stalls

Article summary:

The article is regarding revenue growth stalls that affect even the most successful companies. The article focuses on four major causes of the crisis. The first cause is the premium-position captivity that isthe inability of a firm to respond effectively to new, low-cost competitive challenge or to a significant shift in customer valuation of product features The second reason is the innovation management breakdown that issome chronic problem in managing the internal business process for updating existing product and services and creating new one Third reason is the premature core abandonment that means the failure to fully exploit growth opportunities in the existing core business and acquisitions of growth initiatives in areas relatively distant from existing customers, products, and channels Finally, the fourth cause is the talent bench shortfall that is a lack of leaders and staff with the skills and capabilities required for strategy execution Authors emphasize that these causes are mainly within management control since they result from a choice about strategy or organizational design

They point out that awareness and understanding of these causes assist companies in avoiding the growth stalls. In addition, the article demonstrates few practices that some companies use to predict and prevent the problem.

The article provides examples of companies that have faced the crisis. For instance, the premium position captivity reason was among the main factors causing Levi Strauss to lose its share of market. The company failed to note changes in customer preferences and demand. As a result, companies responsive to a new customer demand successfully entered the market and gained ground. Next, 3M fell into the innovation management breakdown trap when they decided to launch new products in the market. Almost every company in the world will eventually face a period of stalled growth. This phenomenon occurs in every industry, and affects businesses both large and small. Levis strauss had doubled its sales growth till 1995, this year the sales were the highest at the company. After this period , the sales began to decline and no one could forsee the major decline in sales. Many organisations think that the management is not acccountable for the growth stall . they attribute it to factors such as act of god, economic meltdowns, government rules, which are not accountable by the management. However ,in reality these are not the causes of growth stall. The best solution for a company to recover from growth stall is to engage into effective marketing and product distinction. The companies must provide their customers with unique ways of solving problems to make consumers choose one product or service over the other. A self test to diagnose the impending growth stall and the need to anticipate change can reduce the impact on growth stall. In addition to these solutions, a mix pool of people comprising of young fresh blood and with experience should be taken into consideration while special skills tasks are related. A company AYUSH MANDAWEWALA- SMBA 11008. Page 1

Kirby when growth stalls

should recognize the critical workforce in the company and reward them by appraising their performance and by providing them the necessary infrastructure to execute their tasks.

AYUSH MANDAWEWALA- SMBA 11008.

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