Kroger and Part 2 on the External View and Base Rates (Asia Tech Strategy – Podcast 111)

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This week’s podcast is about the external view and the importance of base rates. Berkshire-invested Kroger supermarkets is a good example of a company that can really be viewed externally.

You can listen to this podcast here or at iTunes and Google Podcasts.

Here is my new book:

 

 

Common metrics for base rates:

  • Sales growth
  • Gross profitability (gross profits / assets)
  • Operating leverage. Change in operating profits relative to change in sales.
  • Operating profit margin
  • Earnings growth
  • CFROI

Here is the McKinsey Power Law for economic profits

Here is the McKinsey book Beyond the Hockey Stick.

Here is the Hairy Back graphic from McKinsey

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Related articles:

From the Concept Library, concepts for this article are:

  • External vs. Internal View
  • Regression to the Mean (average / base rates, rate of regression)

From the Company Library, companies for this article are:

  • Kroger

Photo by Peter Bond on Unsplash

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I write, speak and consult about digital strategy and transformation.

My book Moats and Marathons details how to measure competitive advantage in digital businesses.

I also host Tech Strategy, a podcast and subscription newsletter on the strategies of the best digital companies in the US, China and Asia.

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Note: This content (articles, podcasts, website info) is not investment advice. The information and opinions from me and any guests may be incorrect. The numbers and information may be wrong. The views expressed may no longer be relevant or accurate. Investing is risky. Do your own research.

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