Kathryn Harrigan

Managing Maturing Businesses: Restructuring Declining Industries and Revitalizing Troubled Operations

Abstract:
While fully two-thirds of all businesses in the United States, Western Europe, and Japan are experiencing stagnant or slowing demand, most companies in these categories are either unaware of their true situation or do not dare to confront it. Blind to alternatives beyond complete divestiture or milking the investment, they dread the coming of the "endgame"—the latter half of a product's life cycle or an industry's evolution. This critically important new book shows managers how to play the endgame to win—how to guide their firms to prosperity in the face of slowing demand. Divesting or milking may be the best answer in some cases; however, alternative strategies may actually produce healthy cash flows and high return on investment in industries that appeared to be hopeless. Harrigan's strategies include increasing the investment to dominate or gain competitive advantage in a field; employing a "holding pattern" until specific uncertainties (for example, pending legislation, real-world success of new technologies) are resolved; and shrinking selectively to capture the most promising customers (who will provide the most enduring and lucrative demand). An acknowledged expert on mature and declining businesses, Harrigan shows how to analyze the key factors that will affect a firm's success in the endgame: the industry structure, the reasons for plateaued sales, the expectations for future demand, and the strength of competitors. She indicates what is unavoidable in a declining industry (excess capacity) and what is scrupulously to be avoided (price wars). And she suggests the kinds of managerial skills required to operate a mature business successfully. Using the mainframe-computer industry as a chapter-long extended example, Managing Maturing Businesses advises managers on how to assess profit potential, how to restructure mature industries to maximize profits, and how to match management systems to the mature business. The result is an invaluable playbook for managers who want to score big in the high-stakes endgame.

Exact Citation:
Harrigan, Kathryn. Managing Maturing Businesses: Restructuring Declining Industries and Revitalizing Troubled Operations. Lexington, Mass.: Lexington Press, 1988.
Place: Lexington, Mass.
Date: 1988