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Highly profitable business models do not last for 10 years

Highly profitable business models do not last for 10 years

Posted September. 12, 2013 07:31,   


“Any significant differentiation factors can be lost in a moment.”

The 2013 Dong-A Business Forum is held Wednesday at Sheraton Grande Walkerhill Hotel in Seoul. The forum is co-hosted by The Dong-A Ilbo and Channel A and organized by the Dong-A Business Review

This year’s forum, which is the third of the event, is bigger than the previous ones in its scope with world-famous scholars in the field of strategic management who are to present new paradigms of business strategy in the time of rapid change through various sessions for two days. With some 1,000 business leaders from home and abroad in the first day event, attendees said the forum has grown to be one of the best business forums held in Korea.

Professor Cynthia Montgomery, who gave a keynote speech titled “Destroy Your Strategy” in the session A, said, “All competitive edges are subject to change,” adding, “We divided 600 largest American companies into three groups based on return on investment and found out that, 10 years later, both the top group with 45 percent of ROI and the lowest group with minus 4 percent of ROI ended up in the middle with about 19 percent of ROI. This is an empirical reason why leaders should exert themselves continuously in creating values as strategists.”

“In order to create values continuously, think everyday what will happen when your company is closed down,” said the professor, meaning that leaders should conduct a thought experiment or always think of the end of a business. The professor added, “Regardless of industries, if the industry doesn’t change when your company disappears, you’ll be a meaningless existence. As a strategist, a leader should be a maker of meaning.”

Professor Richard Rumelt, a keynote speaker of the session B, said, “A strategy is a coherent policy and a course of action to solve a pending important issue,” adding, “A good strategy must be followed by action. But many people think strategy and action separately and face troubles later.”

On Thursday morning, the last day of the forum, Gary Hamel, a visiting professor at London Business School, and Dominic Barton, the chairman of McKinsey & Company, will give keynote speeches followed by a panel discussion.