What is in this article?:
- Metalcasting Growth Strategies III: How to Grow When the Market Doesn't
- Defining 'The Core'
- Identifying 'Adjacencies'
- Core and Adjacencies Considerations by Foundry Business Model
Foundry overall is a slow-growth market. Generally, the industry is very competitive, leading to low profitability and financial instability for many foundries. Nonetheless, long-term sustained and profitable growth is achieved by some management teams even in this challenging environment. How do they do it?
Defining a unique and differentiable position at the core of a company's business is paramount to creating a solid foundation for profitable growth. Once defined and well understood, identifying business adjacencies that offer promising possibilities for profitable growth can be identified, prioritized, and resourced. If chosen properly, progressing into these adjacencies not only will leverage the core, it also will protect, strengthen, and ultimately expand the core. This tool-set growth strategy has been well described by Chris Zook and James Allen, in Profit From the Core, published by the Harvard Business School Press, 2001.
Here, our attention is on the concepts of 'core business' and 'adjacencies,' as well as 'opportunity mapping.' These concepts also are discussed from the perspective of the four basic foundry business models – jobbing; captive; independent market-focused; and, semi-captive foundries (see “How Foundries Make Their Money,” FM&T November 2012, p18.) Subsequent installments will provide some deep dives into various adjacencies specific to foundry businesses.