A good industry has four characteristics:
1) is in the early stage of S-curve growth and will soon enter the accelerated growth period;
2) The compound growth rate of the industry is very fast, not only in the past, but also in the foreseeable future;
3) the long-term industry space is large enough, and the space determines the height of the stock price and the valuation ceiling;
4) A really good industry should be a winner-take-all industry in the future, and the growth of leading companies is faster than that of the industry.
The high-growth company with S-shaped curve has three characteristics: the industrial status has been significantly improved, the competitive pattern has undergone obvious qualitative change, and the performance growth rate has to go up a step.
Author: Rangy95
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Source: Snowball
The meaning of s curve
At least in the late19th century, the word "S-curve" has been used in business circles, but it was not until the 1960s that EverettRogers published the book "Diffusion of Innovation" that the word was widely used. In this book, Rogers shows readers that the cumulative number of innovative adopters is S-shaped.
He also summed up the characteristics of innovation adopters, thus forming a term that is still widely used today. In the network era, the meaning of S-curve phenomenon is used to explain the continuous emergence of new technologies related to the Internet.
Geoffrey Moore's Crossing the Gap and other bestsellers explain how new technology companies get rid of the bottom of the curve and gradually climb to the top.
We find that the S-curve term can also be used to describe the performance of enterprises in a period of time. In the final analysis, enterprises must successfully provide some innovative products to customers in order to flourish.
Everything is difficult at the beginning, and the initial performance growth is slow. Enterprises strive to find their own business model; With the expansion of product attractiveness, enterprises have experienced a period of rapid growth. When the market tends to be saturated and imitators appear, outdated products are immediately replaced by better products.
When a brand-new commercial product is accepted by early adopters, their acceptance increases rapidly, and the growth tends to be stable after reaching market saturation.
It seems intuitive to regard the outstanding performance of an enterprise as a series of business promotion and leap, but it is impossible to immediately indicate where the starting point is. A large number of literatures about enterprise performance once flourished, all of which focused on revealing the secret of achieving Excellence. Among them, the classic works include:
"Pursuing Excellence", "From Excellence to Excellence" and "Peak Performance". At the same time, other works, such as "The Foundation is Evergreen", "Creative Destruction" and "4+2: The Formula of Enterprise Success" (what (really) works: 4+2.
The formula of sustainable business success) and other works try to reveal the secret of enterprise longevity. However, there is a lack of detailed research-based analysis on the intersection of these two aspects-how enterprises continue to reach the peak of outstanding performance. In order to make up for this gap, Accenture has been committed to the research of outstanding performance since 2003.
In the past 10 years, we have mastered a lot of opinions about how enterprises can continuously achieve outstanding performance. For enterprises bent on achieving outstanding performance, our experience seems counterintuitive: for achieving long-term performance, the key factor is not how much effort to reach the peak (although it is really important), but to cross the next S curve and climb along it again.
Similarly, the secret of successfully crossing the S curve is not to take action at or near the top of the curve, but to prepare for jumping to the next curve. It is the focus of this book that those enterprises that develop along the original S curve greet the next sub-curve with what attitude.