The Financial Times Guide to Strategy: How to Create and Deliver a Winning Strategy, Third Edition

Chapter 2. What businesses are you in?

Within your total Business Unit, there are almost certainly a lot of different businesses, or BUSINESS SEGMENTS: far more than you realise. The first step is to define what these different Business Segments (or ‘segments’ for short) are.

Let me explain why this is important. One of the most glorious insights about life, the Universe and everything, is the EIGHTY/TWENTY (80/20) RULE. This states that 80 per cent of the value of any activity is likely to come from 20 per cent of the inputs. Thus, 80 per cent of the value you generate in your work, or come to that, in your home life, is likely to come from the most useful 20 per cent of your time. Similarly, 80 per cent of the profits of a firm are likely to ...