Investaura Management Consultants is pleased to announce the publication of its new book on Business Planning for Managers and Entrepreneurs (ISBN 978-3-9813734-2-4), written by Pierre A. Lurin, a Managing Partner at Investaura. The paperback edition complements the hardback edition first published in 2010, which has been updated and improved. Apart from the new cover, the book addresses a wider audience and includes a foreward where the author shares his recent experience acquired over the period 2010-2014, as well as personal insight on current and future trends. An accompanying eBook (ISBN 978-3-9813734-4-8) also complements the paperback version.
The book is available on Amazon worldwide, including:
as well as many other bookshops. Enjoy!
For those of you who don’t have the time and money to go to business school, don’t worry! You can learn Strategy by reading books and putting the lessons learned into practice.
Three business school professors have travelled through the USA visiting SMEs and small business owners to uncover how they run their business and put strategy into action (http://www.roadside-mba.com/).
Roadside MBA: Back Road Lessons for Entrepreneurs, Executive, and Small Business Owners
written by Michael Mazzeo (Northwestern University’s Kellogg School of Management), Paul Oyer (Stanford University’s Graduate School of Business) and Scott Schaefer (University of Utah’s David Eccles School of Business). The book covers the following contents:
- Scaling a business
- Establishing barriers to entry
- Product differentiation
- Setting prices
- Managing your brand
- Negotiating effectively
- Incentive for employees
- Battling the big boys
- Strategy is a continuous process
You will also discover a new law of business, called ‘Mazzeo’s law’:
Mazzeor’s law : The answer to every strategic question is “It depends”.
Corollary 1: The trick is knowing what it depends on.
Corollary 2: If the answer to a question isn’t “It depends”, then it’s not a strategic question.
You’ll find the book on Amazon UK, as well as many other bookshops.
If you ever thought that you understood what Competition and Strategy are about, then think otherwise.
Understanding Michael Porter: the Essential Guide to Competition and Strategy
written by Joan Magretta, and published by HBR Press (2012), is the best book we have ever read on the topic, and most likely the best ever written.
It is a very, very good summary of Michael Porter’s work and contains many real-life examples (IKEA, Dell, Zara, Southwest Airlines, to name a few). And above all the book is very enjoyable and easy to read. If you have not done so already, then buy it and read it! You will gain a competitive advantage over those in the industry who have not read it so far.
In particular, you will learn that:
- “Competition is about profit, not market share. There is no honor in size or growth if those are profitless.
- Vying to be the best is an intuitive but self-destructive approach to competition. Competitive advantage is not about beating rivals; it’s about creating unique value for customers. If you have a competitive advantage, it will show up in your P&L.
- A distinctive value proposition will translate into a meaningful strategy only if the best set of activities to deliver it is different from the activities performed by rivals. Competitive advantage lies in the activities, in choosing to perform activities differently or to perform different activities from rivals.
- No strategy is meaningful unless it makes clear what the company will NOT do. Making trade-offs is the linchpin that makes competitive advantage possible and sustainable.
- Good strategies depend on many choices, not one, and on the connections among them. A core competence alone will rarely produce a sustainable competitive advantage.”
Thanks Joan for writing this fantastic book. You’ll find the book on Amazon UK, as well as many other bookshops.
For those of you who are either new to financial statements, or want to learn how to read financial statements like Waren Buffett does, and better understand “what he saw”, there is this fantastic easy-to-read little book:
Warren Buffett and the Interpretation of Financial Statements: The search for the Company with a Durable Competitive Advantage
from Simon & Schuster. Check it on Amazon.
Forget P/E ratios when buying stocks! This book invites you to put your focus on what really matters: Gross Margin; SG&A; EBIT Margin; Earnings / Price ratio; Fixed assets; R&D expenses; Retained earnings and growth in Retained earnings; Debt; Return on Equity; Return on Assets.
Interestingly you will also learn why Warren does like high-tech firms – they have to spend huge amounts of money on R&D to keep their competitive advantage; and even then, their durable advantage might wear out. Think of Nokia and how its market capitalisation went down from USD 78bn in early 2006 to USD 7bn in July 2012 (-90%). Warren does not like that, and the book explains why these stocks are not the right ones to become mega-rich over the long term. And why buy stocks if you don’t want to become rich?
Even more important, you will learn how Warren looks at a share as an ‘equity bond’ i.e. its pre-tax earnings (equivalent to the bond coupon / interest payment), the historical growth of earnings and their relation to the current share price. When Warren bought Coca-Cola in the late 80s at USD 6.5 a share, he bought shares in a company that was essentially generating a pre-tax earning of 11% on his USD 6.5 investment, and had been growing its earnings at an annual rate of 15% historically. 20 years later, Coca-Cola generates an EBIT per share of more than USD 4, so the company is paying Warren a pre-tax yield of 60% (post-tax 40%) on his initial investment. Do you know a bond that increases its coupon from 11% to 60% over 20 years?
Whatever the current stock market price of Coca-Cola is, the Coca-Cola ‘equity bond’ was a fantastic investment for Warren. And whatever the ups and downs on the stock market, the market eventually recognises this kind of performance and increases the price of the shares to a level that reflects their true value. And the value of a Coca-Cola share is around USD 76 in mid-July 2012…
Thinking about launching a new business? Then there is one book not to be missed:
Entrepreneur’s Tookit: Tools and Techniques to Launch and Grow Your New Business
from Harvard Business School Press. In this book, you will learn the following:
- Self-Diagnosis: Do you have the right stuff to start a business?
- Finding and Evaluating the Opportunity: Is it real and large enough?
- Organizing the Entreprise: Which form is best for you?
- Building a Business Model and Strategy: How they work together
- Writing a Business Plan: The basics
- Financing the Business: Where’s the money?
- Angels and Venture Capitalists: For serious outside equity
- Going Public: Adventures in the capital markets
- Entreprise Growth: The challenge to management
- Keeping the Entrepreneurial Spirit Alive: The ultimate challenge of success
- Harvert Time: Reaping what you have sown
This book is a must read for any new entrepreneur. You can buy it on Amazon.
Last but not least, there is a collection of business tools available on the Harvard Business Essentials companion web site, included a pro-forma financial plan template. Get your own copy!