In a previous post we discussed using a simple matrix to evaluate growth strategies; you can read it here. In this post we will examine the four options and compare them. To do this we will use the following parameters:
· Overview discussion
· Difficulty
· Risk
· Impact to the business
To refresh, the four growth strategies to be examined are:
· Current Product, Current Market
· Current Product, New Market
· New Product, Current Market
· New Product, New Market
In this entry we will focus on the last on the list.
New Product, New Market
Overview: New Product, New Market can be tough. Not impossible but it is the least natural of the four strategies and therefore more difficult and riskier. Typically, New Product, New Market is almost always only attempted in serious situations. To begin, you could:
· Inventory what you have: Assets, skills, knowledge, experience, contacts, relationships: inventory everything that could possibly be leveraged to provide value for some other business or consumer. Make a manifest of all of them.
· Inventory what is needed in the market: document the challenges are businesses or consumers are facing, read industry news, gain an understanding of “where the puck is going to be.”
· Compare the two inventories: where is the overlap? What do you have that the market wants or needs?
· Strategic Planning: leveraging what you have to address what is wanted or needed is going to require a sound strategy as well as a complete plan for executing
Difficulty: New Product, New Market is difficult. One is leaving the safety of current products, markets, customers and familiarity to strike out to radically change the course of the company.
Risk: As with difficulty the risk is high. The only greater risk is that of surrender.
Impact to the Business: The impact is radical – often it is the last effort to keep the business running. But it is not a death knell. Simon Sinek tells a wonderful story of a business that succeeded in New Product, New Market that I will quote here:
“I‘ll give you one of my favorite examples. There‘s a pizza place in Chicago called Dimo’s Pizza. Dimo’s made 70% of its revenues from selling slices. Covid hits and Dimo‘s says: ‘Shit, we‘re not equipped for home delivery. We‘re a slice place. What are we going to do?’ Any other pizza place would say: ‘We have a pizza oven. All we can do is make pizzas. We’re done for.’ But that’s not what it did. Instead, it says: ‘We have resources. What can we do with a pizza oven?’ It turns out pizza ovens burn much hotter than regular ovens, so it can bend industrial grade plastic. What it did was start taking sheets of industrial grade plastic and making face shields for healthcare workers, and then it delivered them in pizza boxes.”
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