SHANGHAI – December 10, 2018 – Edge Strategy: A New Mindset for Profitable Growth (Harvard Business Review Press), a book by leading strategy experts at L.E.K. Consulting, has been translated into Simplified Chinese (China Renmin University Press). This is the first of multiple foreign language translations of the book.
Edge Strategy shows business leaders how to expand profitably with low risk by building new products and businesses out of their current capabilities.
“Too many companies choose expansion opportunities that are too small—trying to squeeze more from their mature existing businesses—or too big—radical expansion, often through acquisition, into unfamiliar industries,” says Alan Lewis, Managing Director at L.E.K. Consulting and co-author of the book (with L.E.K. Consulting Managing Director Dan McKone). “Those that choose too-small opportunities risk wasting a lot of effort. Those that choose too-big opportunities risk a lot of shareholder capital.”
Edge Strategy shows a proven middle way that offers higher margins with far less risk. It recommends that business leaders seek expansion opportunities at the boundaries of their existing businesses. They can do this by adding options to existing products (Royal Caribbean Cruise Lines offers passengers seven different beverage packages at different price points); creating services for customers who buy your product (Colfax offers a wide array of services to help customer who buy its welding guns and TIG torches from education and product training to engineering consulting); or turning the byproducts of their operations into new businesses (Toyota captures the speed and position of cars it sells in Japan that use its GPS system and sells traffic data to municipal planning departments and corporate delivery fleets).
“The message of Edge Strategy is that you have assets that can make new products and services, and you have customers that want more than you are currently delivering,” says Helen Chen, a Partner in L.E.K. Consulting’s Shanghai office. (The firm has had a presence in China since 1998.)
“This is particularly important to companies facing the challenge of China’s multispeed economy, in which rapid, sometimes double-digit growth has slowed in some sectors, even as it continues in others.” Ms. Chen says. “Business leaders know that they can no longer rely on dramatic levels of growth simply as a given. Instead, they need to focus more sharply on whether they have the right capabilities, business model and product offerings to compete going forward. That’s why Edge Strategy is generating such interest.”
Companies that develop edge strategies can reap substantial rewards. L.E.K. Consulting carefully analyzed 585 of the world’s largest corporations, and found that while a majority of companies use Edge Strategies occasionally, only 10 percent consistently find and exploit the edges of their businesses. But those that did reaped rewards. These “edge achievers” have delivered their shareholders risk-adjusted returns that are 15 percent higher than other companies over a three-year period. And revenue for the edge achievers grew by 39 percent more than their peers.
“The important lesson is that you don’t have to leap into a new business or acquisition that is far from your company’s comfort zone,” Ms. Chen adds. “In fact, you shouldn’t. There are opportunities hiding in plain sight that can unlock more return from the risk you’ve already taken. Edge Strategy will create more and more opportunities in every part of your business to innovate and grow in a highly profitable fashion using things you have already paid for.”
About L.E.K. Consulting
L.E.K. Consulting is a global management consulting firm that uses deep industry expertise and rigorous analysis to help business leaders achieve practical results with real impact. We are uncompromising in our approach to helping clients consistently make better decisions, deliver improved business performance and create greater shareholder returns. The firm advises and supports global companies that are leaders in their industries — including the largest private and public sector organizations, private equity firms and emerging entrepreneurial businesses. Founded more than 30 years ago, L.E.K. employs more than 1,400 professionals across the Americas, Asia-Pacific and Europe. For more information, go to www.lek.com.
Edge Strategy® is a registered trademark of L.E.K. Consulting LLC.