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Date Submitted: 05/31/2012 09:16 PM
What if you’ve taken your
core as far as it can go?
Finding
Your Next
C RE
BY
CHRIS
ZOOK
Business
66 Harvard Business Review
|
April 2007
|
hbr.org
Christoph Niemann
I
T IS A WONDER HOW MANY MANAGEMENT TEAMS fail
to exploit, or even perceive, the full potential of the basic
businesses they are in. 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. Bausch &
Lomb is a classic example. Its eagerness to move beyond contact lenses took it into dental products, skin care, and even
hearing aids in the 1990s. Today B&L has divested itself of all
those businesses at a loss, and is scrambling in the category
it once dominated (where Johnson & Johnson now leads).
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. Both these companies were once darlings of
YEL MAG CYAN BLACK
Finding Your Next Core Business
Wall Street, each with an intelligent management team and
a formerly dominant core. And in a sense, they made the
same mistake: They misjudged the point their core business
had reached in its life cycle and whether it was time to stay
focused, expand, or move on.
How do you know when your core needs to change in
some fundamental way? And how do you determine what
the new core should be? These are the questions that have
driven my conversations with senior managers and the efforts of my research team over the past three years. 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. We’ve also concluded from
an in-depth study of companies that have redefined their
cores (including Apple, IBM, De Beers, PerkinElmer, and 21
others) that there is a right way to go about...