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The Momentum Effect
Book

The Momentum Effect

How to Ignite Exceptional Growth

J.C. Larreche
Wharton School Publishing, 2008
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Editorial Rating

6

Qualities

  • Comprehensive
  • Analytical
  • Scientific

Recommendation

Apple’s customers love its products. They line up overnight to be the first to buy its newest offerings. They form user groups, becoming Apple “tribe” members. With such loyal customers, Apple has attained self-sustaining business momentum. How did it achieve this rank? Do its managers spend their time slashing costs? No, Apple’s leaders focus on developing products that people feel they simply must have. In this carefully conceived, comprehensive book, business professor and consultant J.C. Larreche examines the way firms that have such momentum gain it and sustain it. The book is dense and it uses a fair dose of jargon to convey the power of momentum. Yet, Larreche’s lesson that product quality and customer satisfaction (or, better, adoration) are the roots of momentum comes through clearly. It might cross your mind that if you could create products that engender as much devotion as the iPod, well, you already would have done it. This book sets out to show you how. getAbstract recommends this treatise on innovative, customer-driven products and services to executives who want to pump up their products and their sales.

Summary

The Importance of Momentum

Businesses should aim for superlative growth that beats expectations every year and moves them well ahead of their competitors. This type of growth depends on momentum, not just marketing. One study shows that firms that capitalized properly on their momentum increased “shareholder value 80% above the Dow Jones Index” over a 20-year period studded by growing revenues and profitability, effective marketing and lower advertising-to-sales ratios.

“Momentum-deficient firms” bog down with inferior products, fail to develop new, better products, lack creativity or are lacking in some other way. To make up for these inadequacies, such businesses tend to resort to “heavy-handed marketing” to force-feed their products to the public. Because they overspend on marketing, they have less money for the polished operations and innovative research and development (R&D) activities that could result in superior products. Such companies are in a momentum-stifling rut.

Toyota is a momentum-driven firm. It focuses on satisfying its customers and constantly developing new value (for example, the Prius and the Lexus) so it can stay ahead of the pack. ...

About the Author

J.C. Larreche holds the Alfred H. Heineken Chair at INSEAD. He is a consultant to numerous global Fortune 500 corporations and the founding chairman of a strategic development consultancy firm.

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