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Don’t Blame Your Company’s Poor Performance on Its Industry – HBR

Industry and Market Analysis

Between 2002 and 2012, the shareholder return of the average airline company rose an uninspiring 5.6% a year. Diversified consumer services were a notch lower, gaining just 4.2% a year. Worst of all were computers and peripherals companies, with a 3% average annual return – barely the rate of inflation in many parts of the world.

It was just lousy timing if you happened to be in one of these industries, which were all in the bottom quartile of total shareholder returns (share price change plus dividends paid) in the 10 years through 2012.

However, one thing you can probably count on, if you are in one of these industries, is that average TSRs in your sector will be better in the next 10 years. Perhaps by a lot.


Source: Harvard Business Review

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