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From daily round business to long term value creation

Jérôme Constant • 1 December 2020
In Q3 2020, during the Covid-19 wave 2 in Europe and wave 3 in USA, the Venture Capital eco-system hits various new records
  • a total global funding reaching $70 B (highest level since Q4 2018),
  • an average deal size of $17 M (+33% vs Q2 2020),
  • the Unicorns club surpassing 500 companies.
Venture Capital money represents only a part of the investments but these account for some of the key innovations & business growth across all type of segments, markets or business sectors through 
  • new entrants,
  • new products or services,
  • new user experiences,
  • new usages,
  • new problem-solution fit,
  • new industry boundaries,
  • new business models, … 
Even if some results of the Eurochambres economic survey 2020 indicate that the macro-economy recovery will take some time (this could be accelerated by the Covid-19 vaccine availability), 70% of Belgium enterprises declare that their investments will stay stable or increase in 2021. 

It means, among others, that innovation and business growth are certainly not the prerogative of the VC funds, start-ups or scale-ups. 

All type of companies can strengthen their long-term value creation, if they don’t focus mainly on their daily round business, in stand alone or with partners in various ways like
  • market penetration or globalization,
  • (un-)related diversification, 
  • vertical integration, …
Here below examples illustrating the different types & mode of business growth. 
Let’s focus on 2 of them occurring in 2020 during the Covid-19 crisis.


Cora delivery by Uber Eats


In October 2020, Cora signed a partnership with Uber Eats allowing Cora’s customers to order via the Uber Eats App prepared dishes but also fresh products, groceries, everyday essentials,… delivered by Uber Eats. The delivery should occur in 30 minutes within a radius of 3 kilometers.

With this partnership Cora has the ambition to answer new consumption habits of a younger audience.



Serial 1 electric bicycle by Harley-Davidson


In November 2020, Harley-Davidson decided to enter the electric bicycle market, a new growing market for them, with a worldwide value of $15 B. The H-D strategic move is sustained by the launch of a new company, a new stand-alone brand “Serial 1”.

The main reasons of this market move were i) the Millennial & Gen Z seem less attracted by the current H-D portfolio, ii) this last does not answer current mobility concerns.



The new normal accentuates the digitalization needs, the environmental issues, the mobility concerns, the new organization of work,… This unique socioeconomic environment brought new problems, new needs, new usages, new ways of interacting, new users experiences, new business models, new solutions,… 

 

The new normal abounds of business growth opportunities. Furthermore, a single cost reduction strategy i) has only a time, ii) is not inspiring for employees and customers, iii) does not create long term value. 

So, whatever your sector, at one time or another your business growth will be linked to one of the types & mode of Corporate growth in order to capture new demand and not to fight only for existing customers.

It will create long term value for your company and shareholders.


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