Toronto, August 20, 2012 – 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 (Harvard Business Review Press) Laurence Capron and Will Mitchell show how ineffectively most businesses plan for growth.
Laurence Capron is the Paul Desmarais Chaired Professor of Partnership and Active Ownership at INSEAD, France and director of the INSEAD executive education program on M&As and corporate strategy. Will Mitchell holds the Anthony S. Fell Chair in New Technologies and Commercialization as a visiting professor of strategic management at the University of Toronto’s Rotman School of Management.
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.
Firms using a robust ‘build-borrow-buy’ framework to procure new resources are shown to be 46 percent more likely to survive over a five-year period than those using only alliances, 26 percent more likely than those using only M&A, and 12 percent more likely than those using only internal development.
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 Itaú 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.
For more information, please visit http://www.build-borrow-buy.com .