This action might not be possible to undo. Are you sure you want to continue?
2306 Wales Drive • Fax 760-632-0772 Cardiff by the Sea, CA 92007 www.kosnar.com Tel 760-632-8402 firstname.lastname@example.org
Private Equity Firms Need a New Blueprint for Their Portfolios
The past year's economic upheaval ended private equity's long "golden age" of debt-fueled mega-deals and big returns. Turbulent times such as those facing private equity firms now create oncein-a-career experiences fraught with extraordinary opportunities and risks. Many private equity firms need to adopt the same disciplines the most successful firms use to create sustainable value in their portfolio companies; specifically, define a clear strategy for competing effectively in their markets and put in place a focused blueprint for delivering it. Against this background of once-in-a-generation challenges and opportunities, Harvard Business Press will publish an updated edition of “Profit from the Core” in February 2010. The principles and findings of the book provide insights into how and why companies succeed in the search for sustained, profitable growth:
Most sustained, profitable growth companies have leadership positions in their cores that form the epicenters of their strategies. The No. 1 rule of strategy is to discourage your competitors from investing in your core. The greatest source of strategic error, we find, stems from an inaccurate understanding of the core and its full potential. Strong cores often contain hidden assets that prove to be the seeds of the next wave of growth. The key to sustained and profitable growth is to find a repeatable formula that utilizes the most powerful and differentiated strengths in your core and applies them to a series of new "adjacent" markets.
And here is my point. Have you considered franchising or licensing any of your core businesses in order to achieve exponential growth through a repeatable formula? Have you examined your portfolio to identify companies that would benefit from developing new channels of distribution through franchising that would help to usurp competitors? Another consideration that franchising offers both public and private companies is “off-balance sheet financing.” Facilities such as office, retail and manufacturing fixed assets, in addition to the infrastructure and personnel to support these modalities, can be created with franchiseeinvestor funding both domestically and internationally. The franchise company does not have to dilute stockholder equity or issue debt instruments to control the channel of distribution of its goods and services through a franchise network.
Franchising is a known commodity to the financial markets. Investment bankers, institutional investors, and individual investors are all familiar with franchising and have had some exposure to franchising whether it is in the retail, wholesale, manufacturing or business services sector. This familiarity with the franchising system allows investors to feel comfortable with a company’s business model for expansion based on the hundreds of companies that have succeeded and have become household words, such as McDonald’s, KFC, Ford Motors, Coca Cola, Midas and Shell Oil.
THIS PUBLICATION HAS BEEN BROUGHT TO YOU BY:
CARL J. KOSNAR MANAGING PARTNER THE KOSNAR GROUP 2306 WALES DRIVE CARDIFF BY THE SEA, CA 92007 PHONE: (760) 632-8402 FAX: (760) 632-0772 email@example.com www.kosnar.com www.scribd.com/carlkosnar
COPYRIGHT/CONTACT INFO - The contents of this Newsletter may be copied, reproduced or freely distributed for all nonprofit purposes without the consent of THE KOSNAR GROUP as long as OUR name and contact information are included. If you wish to UNSUBSCRIBE from our TKG Newsletter: e-mail us at firstname.lastname@example.org with UNSUBSCRIBE or REMOVE in the subject.