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SKILLS AND CASH

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The strictly growth business business must satisfy itself that it has the knowledge base, human resource skills and cash for it to be able to excel. This core competence can be either in marketing or technology.

The business with marketing core competence will seek to supply a range of products designed for a specific customer base. It may well manufacture these products, but marketing driven businesses can also be either designers or distributors only, factoring a range of products from specialist manufacturers.

The technology driven business will use its unique competence to design and manufacturer a range of products based on its technological skills. It might choose to sell these products direct or via distributors.

Each product market requires different levels of functional support. Some markets e.g Pharmaceuticals, demand exceptionally large research and development resources. Other markets e.g. consumer goods, require high levels of advertising and promotion.

The real cost of operating in a given market is the mix of functional support required to maintain it in the long term.

The strictly growth business needs to know whether it can source, attract and finance the resources required by the product market. Every business has its own core competence where it has both the knowledge base, the human resources and unique competitive strengths. The business should build on these rather than seek to add new competence. Adding competence is not only difficult but also highly risky. However successful a business may be it will be known in the market for its own particular skills and expertise, and it will always find it difficult to attract the best human resources in new areas of competence.

Growth for any product line must always be financed from cash flow, or the very strong certainty of immediate future cash flow. Absolute certainty in the future is impossible of course and financing growth from projected future cash flows is one of the most risky ventures. The strictly growth business will have a number of products in the portfolio to support and each should ideally rely on its own performance.

STRICTLY GROWTH BUSINESS

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