The
Star Principle: How It Can Make You Rich
Is a book written by Richard Koch and he tells us how he has
become rich through star businesses. The book is divided into 3 parts: The
idea, Find a Star and Nurture a Star.
Previously he had been manager at “Boston Consulting Group”
and according to its diagram he defines companies into four different groups:
Cash Cows: Are
companies with high market share who generate cash in excess of the amount of
cash needed to maintain the business and their growth rate is slow.
Dogs: Are the
companies that generate enough cash to maintain the business market share and
again these companies are the followers in low growth markets.
Question Mark: Are
the companies growing rapidly and thus consume large amounts of cash, but
because they have low market shares they do not generate much cash. The result
is large net cash consumption.
STAR: Are the leaders in high growth markets. They provide
increasing and higher returns.
Koch tells us as stars are rare also being part of Star
Companies can lead you to success and big returns.
The size of the star company is measured by the revenue of
it and it doesn’t matter how big or small the company is. Koch focuses in this
book more on star companies who are a niche. His tend is to tell us to invest
on Star Businesses and you will be rich soon and he is sure about that and is
based also on his experience.
This book is for people who want to invest their money and
also for employees who work for a Star business. Anyway whoever you are
investing in Star Business will make your life more comfortable and richer in a
way.
I would consider as Star businesses in Albania the telecommunications
company,
pharmaceutics, TV Companies (big ones), Banks (big ones) etc.
We have decided to present on class the “ALKALOID”
pharmaceutical company because we considered it as a Star Business in Albania
considering the fact that they had an increase of 38 % on Revenue from
2006-2010.
I would recommend to the class who have not seen the movie "Wall Street - Money never sleep" because is very interesting.
I agree with you Elvis. The stars in Albania are the companies in the profiles you mentioned but there is a risk that many of those will become cash cows soon. Like all stars there's the period of shining. Afterwards there is either the dimming and vanishing(company goes bankrupt), or the continuation of shining but at a lesser extent(company becomes a cash cow)
YanıtlaSilS.K.
I found the book very simple to read and
YanıtlaSilunderstand with an easy style which bring you
straight to the main theme, and hopefully in the
future it will serve me for practicing my
knowledge in a businesses star company.
``STAR: Are the leaders in high growth markets. They provide increasing and higher returns.``
YanıtlaSilthis defines the star but what about the markets. what if the markets work unproperly and the in unprofessional way? And in the same way they provide %10 growth is the leader a star in this market? the book leaves this question unanswered.
You are right Elvis,, we have many star companies in Albania and I would add that the market here has a lot of potential for other stars as well , because as a market opened just from 20 years, I think it laks many products and especially services..
YanıtlaSil