You want to grow your business; but how?
Many businesses first though is diversification; develop new markets or introduce new products and services without first maximising the opportunity in their core business.
What is your core business? The business(es) which represents most of your profits today! And it probably represents your best option for growth. It is represented by the market penetration strategy shown in the ANSOFF matrix above; working smarter with your existing products and services in your existing markets!
5 Incremental Changes to drive Your Core Business:
There are 5 key incremental activities that can drive significant sales and profit growth; increasing the number of leads, improving your conversion rate, growing your average order value, delivering more transactions per customer and driving gross margin. 10% improvement in each delivers a 46% increase in sales and 61% increase in profitability; not bad for 5 incremental improvements!
A former chairman of mine used to refer to this (and similar initiatives as “squeezing the lemon”
Looking at Adjacencies beyond the Core:
When you have squeezed the core, you can begin to look beyond at areas that are adjacent to your core business; new geographies, new products, new markets, new technology etc.
Beware; there are a number of pitfalls when looking beyond the core and remember that opportunities lying closest to your core business represent the least risk.
What are the pitfalls?
- Not understanding your core business; this could lead you down the wrong path; opportunities will either be unobtainable or within your existing business already
- Pursuing opportunities that require you to develop multiple new capabilities; you need to build one capability at a time whilst holding others constant
- Not conducting a reality check with your target customer base; are they interested in your new oﬀering? Do they perceive you as credible in the new space?
- Doing too many things at once; only pursue one adjacency at a time. More than that is distracting
- Look first to your core market; ensure you have “squeezed the lemon … hard
- Looking beyond the core entails risk … nothing wrong with that providing you are aware of the risks you are taking.
- Ensure you do your homework well … a good plan to grow your business is worth its weight in gold
- Ensure you deliver flawless execution and measure the output, making adjustments as required when looking to grow your business!
Read our our blog article – Planning for Business Growth … and the Unintended Consequences