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

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 and speak about digital competition and China / Asia’s leading tech companies.

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

I also run Asia Tech Strategy, a podcast and subscription newsletter on the strategies of China / Asia tech companies.

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