Monday, July 9, 2012

Build, Borrow or Buy: Solving the Growth Dilemma Harvard Business Review Press(2012) 208 p.

Business ecosystems change constantly. Opportunities come and go and the race is won by the most agile. Today’s business leaders know all too well that to compete and grow, they must regularly expand or reinvent – but how should they go about bridging the resource gap? No matter their size or pedigree, firms have a limited number of options: they can innovate internally (build); enter into contracts or alliances and joint ventures (borrow); or merge or acquire (buy). Three clear choices – it seems simple enough – but in their new book, BUILD, BORROW, OR BUY: SOLVING THE GROWTH DILEMMA (August 21, 2012, Harvard Business Review Press) Laurence Capron and Will Mitchell show how ineffectively most companies plan for growth. Drawing on two decades of research and interviews with senior executives across the world, the authors present a step-by-step Resource Pathways Framework that helps business leaders assess the potential benefits and risks of all the possible sourcing modes for their company, and select the best option for each new growth initiative. Throughout the book Capron and Mitchell present cautionary tales of poorly considered growth plans including those of Schering-Plough, Toys 'R' Us, the Indian automotive firm Hero, and BP’s beleaguered Russian ventures. But case studies from Cisco, Johnson & Johnson, and GE in the USA, Danone in Europe, Massmart and MTN in Africa, Tata in India, Banco Ita├║ in Brazil, Coca-Cola FEMSA in Latin America, and others both large and small, illustrate how firms grow more quickly and with less disruption by implicitly following Resource Pathways Framework principles. The core message is clear: firms that learn to select the right pathways to obtain new resources gain competitive advantage. 
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You can download the first chapter at the following page:
This chapter - The Resource Pathways Framework - presents the core framework that outlines the main criteria for firms to choose between the three main growth pathways, Build (Internal Development), Borrow (licensing & alliances) and Buy (M&As).