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 Excellent Information!
All businesses ultimately approach a natural limit to their growth that demands change in strategy or even the core. How to make that change is what "Unstoppable" is all about. Virtually all the success stories built their renewal on "hidden asses" previously unrecognized or underutilized.
Conversely, big bang transforming moves like AOL's merger with Time-Warner are rarely made, and the odds of success low. Another example is McKesson's move from drug distributor to medical information technology with the purchase of HBO. None of the 15 most heralded big-bang transformations of the past ten years increased market value over the period by greater than the stock market average increase; 11 decline, 7 by more than 50%.
Zook presents a model to determine where a company is and what its emphasis should be vs. the sustainable growth cycle: 1)Focus - strengthen core differentiation, drive for superior cost economics. 2)Expand into related adjacencies. 3)Redefine - build dependable new forms of competitive differentiation, target profits of the future.
Example: The New York Times by 1993 had plateaued at $126 million in profits. It then became a national paper by developing new distribution channels outside New York, bringing profits to $539 million, and used increased profits to buy strong regional papers like the Boston Globe. Next, the Internet and CNN etc. brought the need to redefine itself. Unfortunately, neither the Times nor Zook had offered successful answers. The Times did try charging for access to some content (aka "The Wall Street Journal," which charges for any on-line access), but gave up - Zook should have laid out the rationale for why the "Times" was correct or incorrect in that latter decision. Perhaps the "Times" should simply sell out, such as General Dynamics largely did upon recognizing that falling defense spending would create low future profits. (Are newspapers today's buggy-whips?)
CBS' reaction to CNN, G.M. to Toyota, KMart's to Wal-Mart, Xerox's initial to Canon, etc. suggest that the emergence of a superior competitive model is difficult to objectively react to. (Lower costs seem to always be a major part of the problem.) Zook, however, offers no insight - see Clayton Christensen instead.
Another general criticism - "Unstoppable" is often overly vague. Example - "Frito-Lay has driven competitors away while continuously improving on cost, market share, and ROI," without any information as to how this was done.
Zook moves on telling us that the typical industry has more than six competitors. The top two usually capture more than 75% of the profit pool, and market leaders have nearly 2X the market-to-book ratio of followers, and their success rate pursuing adjacencies within two steps of their core is also much higher (40% vs. 17%). Strong leaders also have ore loyal customers (eg. Southwest Airlines 55% vs. Delta's 11%). Only about 10% of followers (#3 or lower ranking) moved up within a decade, while 30% moved lower. Gainers did so either with a new product (eg. Sony's Play Station in video games) or a low-cost model (Southwest Airlines or Amazon).
Samsung was #1 in memory chips, but also spread among numerous other businesses. Overall, its financial results were poor, and headed down. It sold or shut-down 76 product-line, while its head-count fell about half. Samsung focused on improving its memory business (eg. JIT, shorter design cycles). IBM triggered its business renewal by boosting capabilities essential to the core hardware business - its "Integrated Systems Services Corporation" that became larger than hardware by 2001. G.E.'s neglected finance arm became a focus, made 170 acquisitions, and provided 35% of profits and two-thirds of shareholder value. American Airlines' expansion of its SABRE reservation system, American Express' broadening its card beyond travel, Apple's iTunes boosting demand for iPod - are other examples. This entire section of Zook's book is invaluable.
Variations in customer loyalty are likely to indicate differing market segments.
A guide to using assets you have but can't see.
This is the concluding volume in Chris Zook's trilogy on the business core. The previous two books focused on supporting, exploiting and expanding your current core, whereas this book shows what you can do when your current core falters. Zook points out the high risks of defending your core until your company dies, or of jumping to the next new thing and getting it wrong. Then he shows you how to find and exploit your hidden assets. He uses many examples to illustrate his points in a compelling way. The approach is action-oriented and he provides many good questions to ask, lists to use in working things through, and some useful charts and graphs (but not too many). We recommend this book if you are thinking of taking on such a project: It will whet your appetite and motivate your team for what you are going to do. However, before you undertake something this complex and risky, you may want to enlist somebody like Zook who has the expertise to help you.
 A good book that stands on its own
Normally the third book in a series either rehashes the prior two books, or requires that you read all three to understand the authors points. Unstoppable is unique in this regard as the book stands on its own and does not require you to read the other books.
Zook talks in depth about how enterprises can find source of growth from the core of their company either by finding hidden assets, customers or capabilities. The strength of this book is its detailed discussion of each of these sources of growth from the core and extending the core. Zook also provides detailed tools to help the reader apply these ideas to their company. This is particularly unique in a book that addresses issues of growth and growth strategy.
In some ways, Zook's book should be used as a companion to the book "BLUE OCEAN STRATEGY" which talks about identifying opportunities where there are no competitors. Used in combination, Blue Ocean will open up new possibilities, while Unstoppable will provide a way to execute on these opportunities and build off of your core to achieve them.
The book is clearly written with detailed case studies and verbatims form actual companies going through their growth processes. This is unique for any business book and Zook's use of extensive interview comments makes the book seem real and actionable rather than academic.
While Zook's book is well researched, there is a subtle and important bias in the research. Zook's results and statistics are largely based on analyzing projects that he and his company have conducted, rather than looking at the general marketplace. This is strength in that the book can talk about implementation details because they did the work. However, it is a subtle weakness in that the cases suffer from selection bias that has a tendency to color the results and conclusions. Zook's attention to detail, pragmatism, and exposing tools do compensate for this research weakness and for most it will not matter, but recognize that it is there.
Overall, I would recommend this book for any executive who is looking to change their enterprise or recognize the need to do more in order to grow. This is one of the top 10 business books I have read so far this year so highly recommended.
How to use the power of hidden assets to redefine your core business
Chris Zook has written two previous books about paying attention to the core of your business and how to mine it for every dollar it will yield. This book talks about what to do when your core is beginning to falter. Rather than letting the rapid changing marketplace stop your company he suggests redefining your core. However, rather than leaping onto some popular bandwagon that has nothing to do with your present core, he advocates finding hidden assets within your company. He offers a process for understanding where you are in your strategic cycle, the Focus-Expand-Redefine (FER) growth cycle. Using this structure, he shows you how to know when it is time to redefine your core and the dangers of getting it wrong.
Zook shows you what to look for in the way of platforms that you could promote from secondary status to become primary areas for your business. These might be technologies you acquired along with the purchase of a company, but it wasn't why you bought the company. It could be adjacent geographic areas, or markets that you could expand into without having to completely recast your company. Or it might be orphan products that you can use to exploit changing market conditions and the new opportunities they often create.
I also agree with and enjoyed the author's emphasis on paying attention to the things your customers can teach you. If long term customers are leaving you they are being served by new competitors, new technologies, or are going out of business. You need to find out exactly what is happening. This also includes learning to segment your customer base as finely as possible. If you can learn to serve micro-segments of your customer base rather than having to treat them as if they were all the same kind of person, you will be able to develop those markets more fully. Your customers will also offer suggestions for improvements to your existing products and services, so pay attention. If you don't meet their needs, your competitors will. When they suggest new products to you, listen even more closely.
The other place to find hidden assets are in your capacities. That is the ability your company has to execute and repeat value creating tasks at a high level of quality. You should inventory the dozens to hundreds of capacities your company has and then figure out which are the most critical. Those are your core capabilities. Are there other things you could use them for? Are there capacities that are important in supporting the core that could be recast to become core capabilities in their own right?
I think this book offers some important food for thought. When you can work the FER cycle of growth you can become unstoppable, not because the old core doesn't burn out, but because you kindle and ignite a new fire to run your company's engine before it does.
reviewed by Craig Matteson, Ann Arbor, MI
'Unstoppable' - A contemporary approach to business strategy
In an age of ever-shortening corporate life-cycles, Chris Zook examines the way in which some companies have successfully adapted to a harsher and more investor and public conscious corporate environment by expanding, redefining and reinventing their core businesses. As the future of large successful corporate conglomerates becomes increasingly uncertain in the wake of market forces, such as private equity buyouts, hostile or activist shareholder activity and other evolving market forces, which threaten to undermine long-standing successful market strategies, some companies somehow emerge from the shark-infested waters with little resemblance of their former selves and do so with greater vitality, profitability and vigor than ever before. Never before has one author caused a reader to re-examine the strategies that have shaped the global corporate atmosphere for so many years. Companies can no longer simply search for traditional market synergies among affordable competitors, or simply aim to lower production costs or hope to engineer a new product or discover a new market. Instead, these companies will be forced to seek out lesser known `hidden assets' in order to shift their core profit structure. They will also be forced to focus and refine that core and defend it vehemently against emerging low-cost competitors who seek to steal or infringe upon their core. Companies today will be forced to take actions such as these in their aim to become unstoppable, or they will inevitably suffer the consequences which more and more companies find themselves succumbing to.
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