THE TIPPING POINT (PART 3)
[In the eyes of an asset manager, efficient in the capital, trusting data, and rarely acting on emotions]“Hai sees a lot of brothers participating in industries that are not very popular. attractive, it’s not that they’re not good, they don’t make the right choice, it’s basically a lack of information”
Disclaim: the first 2 parts were shared in the Founders Forum group.
Of course, not every company in the market has come to the point of paying attention to … tipping points.
Sometimes the problem they need to care about is more about strategy, choosing which industry to enter with the resources they currently have.
There are 4 aspects for us to choose a location for our business besides paying attention to the tipping point, or the right time to develop or gain a strong position in the market.
- Call IA: The attractiveness of the industry you are in.
- Call CA: Your business’s competitive advantage.
- FS: Financial strength of your business.
- ES: The stability of the current business environment.
So:
All 4 are not good: What should be done?
IA, CA, and ES are not good, but FS is good: What should be done?
Good IA, CA, Bad ES & FS: What to do?
Good IA, bad CA, ES, FS: What to do?
Bad IA, good CA, good FS, negative ES: What to do?
Good CA, bad IA, FS, ES: What to do?
… (Many other things)
There are many sub-indices in the above 4 major aspects used to assess how attractive your business’s position is to investors, the investor’s standard is when, you are participating in an industry with the following factors:
- Good IA
- CA is enough to survive and needs support to improve (Because at this time, the business you value is small, attractive enough for NDT to jump in)
- Good FS
- Good ES.
From the perspective of asset/equity management:
There is no one general answer for each typical case of a business because each company you own has different indicators, it is important that the owner knows the time and does not fall, rigidly entering an industry that is not attractive enough and losing a lot of its costs. (I’m very confident because I love it)
Dare to strongly cut and keep good portfolios to preserve assets is something not everyone dares to do, especially businesses doing business in the KD Vietnam environment. which is not very transparent and is less evaluated by organizations with professional and well-informed indicators.
Or businesses are less run by effective financial reporting…
Is your business suitable to receive the tipping point?
With your current status: Should you max attack, defend, stay inside or move into a new, more attractive industry?
What criteria to determine what you should do in the current context?