The choice you make should be highly informed by insight-led research on your customers, the marketplace, external changes, and trends. The choice you make will define where and how you will grow your business in the immediate future. The choice you make will require precise direction to those you lead on what to do next.
We only wish it were as easy as picking a chocolate candy from the box, don’t we?
This article provides you a high-level roadmap on how you should be thinking about your growth strategy. Assuming you have spent adequate time in the research phase of work to uncover where the opportunities lie for your brands and / or organization, there are essentially four options for growth.
As outlined below, “products” is meant to generally refer to the products and services you sell, and “markets” generally refers to the target audience which you sell your products and services. Markets can comprise channels of trade or geography, as an example.
Current Products to Current Markets
Of the four choices, this particular path focuses on building your market share to a known audience with known products. This strategy may require extra thought on how to sell the same product or service across different channels while controlling critical attributes such as assortment, price and experience. A very familiar example would be how Apple gradually expanded the distribution of their devices across multiple outlets, including the likes of Walmart and Target. The overall Apple assortment and experience can be reduced or increased depending on the target audience in that respective channel.
John Deere is another brand that executes well on delivering a more sophisticated assortment of products in channels where expertise and service is highest, while bringing more basic products to retailers such as Home Depot where the target audience is accustomed to making buying decisions without assistance.
Current Products to New Markets
In this particular strategy, you choose to take your current products to new, adjacent markets where you don’t currently compete. The hurdles you face may possibly include tweaking your product to meet specifications with your new target audience or finding expertise in personnel for a new market. However, the reward can be substantial – access to an entirely new market space.
A terrific example of current products to new markets is the Google lineup of Chromebooks, designed to be a light weight, lower price point, cloud-based laptop. Chromebooks have done extremely well in consumer markets and recently, Google has expanded the product into educational markets where its adding tremendous value in schools for enhanced learning.
New Products to Current Markets
Making choices to develop new products, whether launching into current or existing markets is not one to be made lightly. Product development exercises new organizational muscles – taking on too much, too fast can result in injury. However, new insights can lead to tremendous opportunity for your brand, not to mention, incremental sales growth in new categories or new price points. Typically, new products are launched to the same target market or audience to cater to an unmet need or new discovery.
Another familiar example, illustrative of new products to current markets, would be Keurig’s new Rivo, designed for cappuccino and espresso lovers. Rivo broadens the Keurig line beyond the k-cup coffee brewers and furthers their penetration into consumer markets.
New Products to New Markets
Developing new products and then launching them in unfamiliar markets is one of the more difficult paths of the four, but certainly has the chance to be the very rewarding. The new product development will need to take into account different tastes, preferences, and requirements in terms of your new target audience. This doesn’t even begin to address the capabilities you need to get your final product in the hands of the end user, whether it be supply chain or distribution related. Restaurants wishing to expand to new geography (countries) are often forced to create products and or adjust ingredients in an effort to cater to a new audience.
Once you choose one of the four options, you and your team need to define how the business will execute on the strategy. This will most likely require an extensive audit of your current capabilities and identifying the ones you will need. You might decide to then acquire the capabilities, build them, or outsource them. [In a future article, we will detail the pros and cons of each.]
So, of the four different paths, which one do you choose?
If this is a choice you have not yet made for your business and would like help to make the right choice, or need assistance is designing a go-to-strategy for any of the four different growth strategies, we would love to work with you.
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