Understanding growth and opportunities
October 23, 2010 Leave a comment
Often we hear about industries / locations growing at a torrid speed and how young entrepreneurs could benefit from that. Its true that growing markets provide good opportunities, but its crucial to understand what the growth “really” means. And equally important is to identify the core competency that the companies should develop in order to enter the market and strengthen their positions.
1. Competition: Growth, often, comes with a fierce competition among new comers who want to tap it and become the leaders. Analyzing how the competitors are positioning themselves would provide a good look at how your company’s strategy should look like.
2. Customers: Most often, it is advisable to position yourself “closer” to the end customers. Of course before you do that, you should first find out who your actual customers are. Understanding how customers could benefit your products, and then tweaking your message accordingly is one key marketing process that should not be neglected.
3. Target Industry: It is important to find out what “part” of the industry is actually growing. Typically, most companies jump onto the bandwagon without realizing that the growth of Industry does not necessarily mean that all “niches” or all “associated industries” would also grow. Remember, your “niche” is your “whole” industry. It may be different from the “industry” as described by the analysts. Let me cite an example: If the retail industry is growing at 5%, it does not mean that “all” retail segments are growing at 5%. Identify what part of retail you belong to…and how fast that segment is growing. More you segment it, better picture you will be able to see.
4. Growth Life: Understand the cyclic nature of the industry/business you want to venture into. Every industry has a cycle and understanding this cycle will enable companies from misunderstanding a temporary uplift vs the permanent (or long term) growth.
5. Alignment: Identify how your core competency fits into the industry to tap its growth opportunity. Remember, do not jump into industries with higher growth because they look “sexy”. Aligning your core competency with the industry’s requirement is essential for success.
6. Adaptability: Understand what your business does and what your core competencies are. Many businesses do not understand what business they are in. This stops them from swiftly adapting to new Industry success factors. Be nimble and flexible to adapt to changing market dynamics. Eg: Big companies tend to loose sight of this and end up loosing business. Examples include Borders vs Amazon, Blockbuster vs Netflix.