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24 Growth Strategy Insights


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Just matter of being consistent to make it happen

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24 Growth Strategy Insights

  1. 1. The company to-go for getting added value for your business’09 Newsletter GROWTH STRATEGY INSIGHTS Double-digit growth without a single new product?. Simply focus on making the most of the business youre in. If you want to grow your business by 15% to 20% per year, where do you begin? Do you ask what new business you should be in? Do you adopt a novel strategic framework? Do you seize a new market opportunity? Do you make a big acquisition? Not if youre an SME’s company. You dont yet have the resources to do everything simultaneously. Pursuing risky new businesses, markets, and strategic frameworks too hastily can take your eyes off the ball— with disastrous consequences. Instead, ask what more you can make of the business youre in right now. By focusing on mature activities, you reinforce your foundation of operational excellence—high performance in all areas contributing to customer satisfaction: product quality, lead time, on-time delivery, technical support. From this foundation, you take more adventurous steps in the strategic pathway. This simple but disciplined sequence of priorities starts with protecting your existing business. Then it proceeds to further penetrating existing markets, extending into new markets, and finally diversifying with new products. The strategic pathway isnt new. But following it rigorously can help you resist the siren song of new products and markets until youre ready for them. The strategic pathway comprises four steps: 1. PROTECT WHAT YOU HAVE. Understand what you have, why you have it, whos after it, and how to keep it. Have business unit managers: · Create a competitor/segment matrix. Map rows of competitors against columns of market segments, estimating competitors annual sales in each segment. Determine whos gaining and losing share. Include historical and expected growth rates and your companys current margins in each segment. · Watch for surprises: a market bigger than you thought, rivals encroaching on unexpected segments. Discern threats to your base—and opportunities for growth within existing businesses. · Determine why your companys successful. Ask those closest to your customers— salespeople, engineers, technical support—what customers appreciate most about your company. Is it good technical support? Impressive 1 © ‘Nous nous engageons sur des résultats opérationnels’
  2. 2. The company to-go for getting added value for your business’09 Newsletter lead times? Different customers may value different things, suggesting market segmentation. · Decide whats most worth protecting. Identify businesses needing the most ferocious protection. Take actions to safeguard them. 2. PENETRATE EXISTING MARKET SEGMENTS FURTHER Increase share in market segments you already serve with products you already have— including upgrades and customizations. Concentrate your strengths against rivals weaknesses. 3. EXTEND YOUR BUSINESS Consider new products for existing customers, or new customers for existing products. 4. DIVERSIFY INTO NEW MARKETS Youve strengthened your existing businesses market positions to their realistic limits. Now diversify into new markets with new products Most SME’s can realize significant sales and earnings increases for three to five years without diversification, while positioning themselves for the diversification needed to sustain growth beyond that time horizon through operational excellence… 2 © ‘Nous nous engageons sur des résultats opérationnels’