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Corporate Growth Engines: Driving Sustainable Strategic Advantage

Nanda Ramanujam
Monday, September 1, 2008
Nanda Ramanujam
In today’s highly competitive and rapidly changing business and economic environment, core competence and capability principles have become mainstay concepts of corporate strategic thinking landscape. They lend themselves well to high-level strategic analysis, but their limited focus and static character do not inherently provide either an application roadmap to develop a competence and capability or, given the
existence of a core competence, a framework to
achieve active market superiority. The concept of corporate growth engine, a further development of core competence and capability, unifies and extends several existing strategy paradigms, and spans all three phases of the corporate strategy process - analysis, planning, and execution. Its characteristics can be used by the management team with the desire to actively drive to sustainable strategic advantage as a blueprint for implementation. Some empirical evidence points at significant benefits for both well and poorly run corporations.

Driving profitable corporate growth presents challenges even during times of economic prosperity. This is especially true for companies that have experienced market success and are already sizable. The bigger the base of the sales, the harder it is to grow it meaningfully without deviating from the original value proposition. Yet, there are critical junctures in a company’s development in which senior management needs to look beyond past successes to chart new courses for continued increases in sales and earnings and drive profitability.

Every business whether small, medium, or large consists of five vital components that are essential for its existence, survival, and growth - market, products and services (technology), organization, people, and finance. There are a couple of components like Innovation and M&A, which will propel an organization’s growth. Take away any one of these components and the company ceases to function, all the growth engines utilize the fuel and drive the organization to growth and profitability. Together, the fuel and the power of the growth engines drive the company to growth and prosperity.

Let’s define each of these engines more closely.

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