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For Growth, Starting Position Matters
When it comes to growth, starting position matters. Three starting position archetypes—defined by the stability of a company's competitive environment and the gross margin premium it enjoys over peers—suggest different pathways to value-creating growth:
Fading players, competing in stable environments but lacking a gross margin premium, have the hardest time creating value from growth. Their typical winning strategy is to focus and reposition—reshaping portfolios and reinventing business models to build advantage.
Fortress players have strong premiums in stable environments. They have the highest probability of generating value through growth. Reinvesting in core advantage and pursuing close adjacencies is typically the best strategy for fortress players.
Fluid players operate in unstable environments, and about half of these companies create value in their attempts at growth. This outcome is almost the same regardless of whether a fluid player has starting advantage or not. The classic fluid strategy is to build a portfolio of growth bets and invest in building agility, a culture of experimentation, and the decisiveness to rapidly exit or scale up.