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April 28, 2007
Knowledge as Capital
The McKinsey gang examined corporate performance on two fundamental indicators of sustained competitive advantage—revenue growth and profitability—over an 11-year period from 1994 to 2004. Their finding:
"...we found that ...nine companies had higher market-to-book ratios than their competitors did. (The M/B ratio is a measure of corporate performance that compares a company’s market cap with its book value.)...the top nine performers strongly preferred organic growth: they made few acquisitions and divestitures when compared with other companies in their industries...
In our view, their ability to generate value from knowledge-intensive intangibles (such as copyrights, trade secrets, or strong brands) represents a good starting point for further exploration of their superior performance."
Just connecting the dots.
To connect them yourself, log in at The Elusive Goal of Corporate Outperformance -- McKinsey Quarterly 28 April 2007
Posted by Malcolm Ryder at April 28, 2007 6:28 AM
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