Business & Industry Growth & Competition Framework - Aditya Yadav

1. “Running an Agile Fortune 500 Company”
Aditya Yadav, aditya.yadav@gmail.com
in.linkedin.com/in/adityayadav76
*

2. *
*A Typical Global Company
*Fortune 500/1000
*200 Divisions
*40 Countries
*25000 Employees

3. @ Acme Inc.
*

4. *
*Original Question “We need to put our Firm
and Industry Growth in perspective”
*The Correct Question - “…. And thanks to Data
Science there is a Strategic Framework for
that… You have already seen the Business
Capacity & Organic Business Growth
Framework which was Inward Facing… This is
Outward Facing… You need to use Both
together to understand Growth. Allow me to
explain.”

5. And The Philosophy Behind The Answer
*

6. *
*Assume two firms A and B growing by 10% and
20% respectively
*Assume Industry/Market Growth is 5% from
1000 units to 1050 units
*In One Year
*How do we model this?
*What conclusions can we make?

7. *
Year 1
Growth
Rate
Year 2
Projected
Scaled Year
2
Growth
Rate
Year 3
Projected
A 500 10.00% 550 502 0.43% 504
B 500 20.00% 600 548 9.57% 600
Industry/Market 1000 5.00% 1050 1050 0.00% 1050
Competitive Index 1.10 1.05
Scaled Year
3
Growth
Rate
Year 4
Projected
Scaled Year
4
Growth
Rate
Year 5
Projected
479 -4.53% 458 457 -4.71% 435
571 4.15% 594 593 3.96% 617
1050 0.00% 1050 1050 0.00% 1050
1.00 1.00
Scaled Year
5
Growth
Rate
Year 5
Projected
Scaled Year
5
Growth
Rate
435 -4.88% 413 330 -24.05%
615 3.76% 639 510 -17.14%
1050 -20.00% 840 840 -20.00%
1.25

8. *
*Start with Firm & Industry Growth Projections
*Scale The Projections down/up to Actual
Growth and calculate the Competitive Index
e.g. In Year 2 projected is 1150 while Actual is
1050 hence CI = ~1.1
*Do this every Quarter using Publically available
Information and Financial and Research Reports

9. *
Year 1 2 3 4 5 6
Industry/Market
Growth 5.00% 0.00% 0.00% 0.00% -20.00% -20.00%
Competitive Index 1.10 1.05 1.00 1.00 1.25
A 10.00% 0.43% -4.53% -4.71% -4.88% -24.05%
B 20.00% 9.57% 4.15% 3.96% 3.76% -17.14%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
1 2 3 4 5 6
Industry/Market Growth
Competitive Index
A
B

10. *
* This Chart Seems Uninteresting
because its made using Mock
Data. Real Charts using Industry
and Firms Growth Projections and
Actual Growths are extremely
insightful
* The Industry/ Market Growth
Curve is Normally U shaped
* Competitive Index of 1.0 implies
Status Quo
* Competitive Index Below 1.0
implies Detrimental Monopolistic
Competition. Yay! Now we can
detect this…
* Firm Growth Follows/Lags
Industry/Market Projections
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
1 2 3 4 5 6
Industry/Market Growth
Competitive Index
A
B

11. *
* Rule: Your Survivability in
your Industry is
Proportional to (i) Your
Growth Rate, and then (ii)
your Market Share
* GE has always harped
about the need for being
in the Top 3 in any
industry. Now we can see
why that’s true!
* When your Firm (A)
Growth Declines lower
than Industry Growth It is
Time for M&A…. See Year 2
& 6. This is consistent with
our Mental Understanding.
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
120.00%
140.00%
1 2 3 4 5 6
Industry/Market Growth
Competitive Index
A
B

12. *

13. *
*If you super impose multiple of such charts
from multiple industries, you can
*Compare Cross-Industry Competitive Index’s
*Industry Growth
*Firm Growths
*Economic Policy Impact
*…

14. *
Firm Competitive Index Industry Growth Firm Growth
A 1.05 0.03 0.02
B 1.02 0.16 0.2
C 1.1 0.11 0.15
D 0.87 -0.12 -0.1
E 0.96 -0.05 -0.02
F 1.2 0.3 0.35
G 1.4 0.2 0.25
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0 0.5 1 1.5
The World Map
1.05
1.02
1.1
0.87
0.96
1.2
1.4

15. *
* You get a Composite View
of Industry Growth (Y-Axis)
vs Firm Growth (Area) vs
Competitive Index (X-Axis)
* You can Spot Monopolies
* You can Virtually Conclude
that High Growth Firms
correspond to High Growth
Industries i.e. The Firms
Inherit The Industry Growth
Advantage
-0.15
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0 0.5 1 1.5
The World Map
1.05
1.02
1.1
0.87
0.96
1.2
1.4

16. *
Aditya!!!