How to define a profitable and sustainable growth policy in a changing market?

How to define a profitable and sustainable growth policy in a changing market? A case study: a small publishing company.

A tireless architect founded Grafill, a small book publishing company, at the end of the 80s. He believed that in the real estate and construction sectors there is a lack of practical, reliable and punctual sources of information. To cover such a gap, he launched a monthly review and, started to publish a series of specific books and software to better support engineers, architects, and public utilities in their tasks. During the last two years, both the number of books published and software released, and their relative prices have been sharply increased. Such business strategy contributed to strongly increase company sales revenues, but it didn’t generate a proportional growth in company bank balance. Such period has been also characterised by investments in E-commerce and related customer services, which shows a growing contribution in terms of company sales. On the basis of such results, the entrepreneur believes that this is the right way to pursue Grafill’s growth.
In particular, for the next two years, he foresees to reinforce the number of product to be launched and E-commerce activities. Such growth policy, according to owner’s vision, will enhance virtuous circles that will allow the firm to increase direct sales and related margin, so that to finance further business development. A system dynamics modelling approach has been adopted to better understand business areas interconnections, to assess sustainable strategies and to share learning among the entrepreneur and his direct collaborators.

Paper presentato: 18th International System Dynamics Conference – Bergen, Norway, 6-10 August 2000