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We must take change by the hand or rest assuredly, change will take us by the throat.Winston Churchill

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Build, Borrow or Buy

Build, Borrow or Buy

What are the possible strategies to procure the resources essential to growth?

Author(s): Laurence Capron, Will Mitchell

Publisher: Harvard Business Review Press

Date of publication: 2012

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How to procure the resources essential to growth is one of the most delicate questions a CEO must answer. A bad choice is often extremely costly. However, warn the authors, this choice of resources turns out to be much more complex than anticipated. Some focus on organic growth, while others prefer acquisitions. These two strategies tend to mask other promising alternatives, such as forming alliances or even borrowing resources based on simple contractual agreements.

If there is one essential message to retain from this book, it’s that the resource strategy must be carefully thought out. Isn’t this obvious? Far from it, underline the authors, citing many supporting examples. Most companies continue to seek their resources in the same way they have always done. When problems arise, they blame the quality of strategic execution without realizing that the fundamental problem often lies upstream, because a good resource strategy requires building a balanced portfolio of resources developed organically, acquired or borrowed through alliances or partnerships.

Each of these strategies is described in a dedicated chapter that includes a detailed analysis of many concrete case studies, key success factors, advantages and disadvantages. Numerous relevant checklists are proposed to help companies avoid the many traps that exist in this domain. For example, do you tend, like so many others, to overestimate the ability of your company to develop the required resources in-house? Do you tend to underestimate the inherent difficulties of integrating acquired resources? Do you tend to minimize the potential opportunities of an alliance due to the amount of uncertainty inherent to such agreements? These questions serve as a valuable guide to make more enlightened decisions.

A stimulating, easy-to-read book that will interest the CEO of a multinational as much as the head of a start-up.