Niche Down and Dominate
Some individuals are destined to become Entrepreneurs, they think differently where others see challenges they see opportunity, they chase a dream with unrelenting passion. For others the path to business independence can be an intimating and scary prospect, yet for both their belief remains a constant and with success the benefits endless.
Reflecting back on the numerous founder conversations I’ve been privileged to be involved in, many founders struggle to articulate their niche. Comments such as “We do not want to limit out market”, “We are thinking big”, “We want to avoid limitations” are all common place. By not niching down you attempt to cater to a large market meaning potentially thousands of competitors requiring higher investment in marketing to reach your audience; your chances of success are reduced.
Finding a niche and sticking to it is necessary for new businesses and/or small businesses, niching down makes it makes far easier to describe what you do and sell, in fact the single most important benefit is in being able to communicate your ‘Why’, your reason for being. Simon Sinek’s book ‘Start With Why’ is a compulsory read for all. Many organisations can explain what they do, how they do it yet struggle to articulate why they do it, ‘the golden circle’. Simon’s TEDx is well worth a look https://www.youtube.com/watch?v=u4ZoJKF_VuA .
Deciding to niche down can have a lot of benefits, choosing to focus on a small, well-defined segment means you are excluding any markets that are not in your sweet spot. Entrepreneurs or small/medium sized businesses have fewer resources and need to make sure that their investments are as effective as possible. Focusing on your strengths will save you time and money. Understanding your focus will help identify and connect with the customers, generate a stronger brand awareness and customer engagement model. Establishing yourself as a subject matter expert will enhance your brand. Be bold and use what makes you unique in your marketing set yourself apart and this will help clarify your position as a leader/influencer.
Niching down will help your business become more effective and set for growth. Niching down does not necessarily mean you will only focus on one niche forever, it allows you to focus on your brand, market awareness and develop your voice. With a narrower focus you can: make smarter decisions, scale more effectively, drive better revenue.
At Market Traction we work with businesses who are looking to achieve growth, we understand the constraints of limited resources, and challenges moving into volume production. We give access to resources and expertise that you may not own. We focus on your most critical issues and opportunities by introducing the functional expertise required to execute at pace delivering against your objectives. Our tailored strategies and propositions are underpinned by vigorous commercial analysis designed to deliver growth.
Contact us: info@markettraction.io
Business Growth Beyond Survival
As we look forward and collectively try to understand what the business environment might look like as we emerge from the global lockdown, consider the various scenarios and predictions one thing remains clear in my mind, agility and flexibility will be paramount to success.
You will all have heard the shocking predications that the global economy will fall into a depression similar to the 1930’s, remaining optimistic I see more of an economic compression, I am not predicting a ‘V’ shape bounce although I do believe that the fundamentals are very different and something I will discuss in a later blog. What is clear to me is that demand still remains, it may soften nevertheless it has not abated.
Conventional commercial wisdom has always suggested that the ‘BIG eat the small’, this I believe to be defunct. As we emerge size remains irrelevant, of critical importance is an organisations ability to deal with high velocity whilst remaining both agile and flexible. Adapting to speed will be critical to success, as we surface from this economic lockdown organisations will need to recognise the game has changed, action needs to be taken to act quickly and lead. Those looking for growth should not shy away from adopting new, emerging technologies as well as product diversification.
When considering new product strategies it is always prudent to first revisit your product SWOT analysis, I then promote the use of the Ansoff Matrix in exploring future growth opportunities.
The Ansoff Matrix is a strategic planning tool that provides a framework to help devise strategies. Each quadrant represents a different strategy and a different risk reward ratio.
There are four basic growth strategies to expand your business: market penetration, product development, market development and diversification.
Which strategy should the company pursue? To answer this you need to overlay the outputs of your product SWOT analysis, this will allow for better decision making from which you will be able to gain a better understanding of the risk/reward ratio.
Market Penetration: The first quadrant in the Ansoff matrix and the most common strategy deployed. With a knowledge of a known market its needs and the competitive landscape companies most commonly look to increase market share through commercial levers such as price. The challenge remains profitability and a potential race to the bottom as competition become more intense. The good example of such a scenario is the broadband industry.
Market Development: Market development is the second market growth strategy in the Ansoff matrix. This strategy can be an effective way to grow in the short to medium term, new markets are targeted using the existing product and infrastructure. Note also that new markets can be geographic or new market sectors. There are several examples with Apple leading the way.
Product Development: Product development refers to a scenario where a company may have a good market share in its existing sector and begins to see the risk of diminishing rates of returns, expansion needs to come form new products and services. A market penetration strategy is no longer viable and a new product development strategy is a better proposition.
Diversification: The diversification strategy in the Ansoff matrix applies when the product is completely new and is being introduced into a new market.
Although the highest risk approach, as both market and product development is required, the risk can be mitigated through related diversification. There could be potential synergies between the existing business and the new product/market.
The decision on which strategy to pursue will depend on a number of factors, what is clear is we will emerge into a different landscape, ‘business growth beyond survival is critical’, doing what you always did will not deliver what you always had, be ready to embrace change.
Time will remain a precious commodity as many of the commercial activities that have ceased begin again and business as normal monopolies the working day. Consider the expansion of your resource to include subject matter experts to help navigate through development and diversification in an agile and flexible manner.
At Market Traction We work with businesses who are looking to achieve growth. Through joint collaboration we amplify your ideas and through our S.A.F.E DNA of Simplicity, Agility, Flexibility and Execution provide a framework that enables us to challenge the status quo and business norms. We passionately enable the creative few, corporate entrepreneur and commercial visionaries. We deliver this whilst ensuing a relentless speed of execution. We breathe life into your products and your services, we generate market traction.
Contact us: info@markettraction.io
Life After
Society and community have never faced such challenging times, we have no clarity of what our world will look like, and I for one am not aligned to the Trump rhetoric of ‘open for business in a number of weeks’. This does not feel to me like the pause button has been hit, more ‘Ctrl Alt Del’. The global economy has required immediate triage and for the most part the Politicians are responding quickly. We may well see some restrictions lifted in weeks and not months giving a sense of relief, then the realization and anxiety kicks in as to the economic damage we face, and the potential looping of this virus later in the year.
I wondered what does the future hold? Some of you may have read my article ‘Clarity of Vision For The Next Decade’ little did any of us know that at the time of writing we would be facing such a global challenge effecting both individual wellbeing and our economic futures.
Technology has remained the mainstay of the global economy and continues to pump blood to our economic heart, those companies who have adapted and focused on the digitalization of their business although impacted appear to be fairing better; the question remains what will the future look like?
Reflecting back I recalled a TEDx given by Economist Andrew McAfee titled ‘What will future jobs look like?’ I would heartedly recommend it. One of Andrew’s opening statement “We are going to see more and more things that look like science fiction and fewer that look like Jobs” seems profound. AI in its various forms Siri and Watson with their emerging cognitive learning could replace call centers and customer services, robotics in distribution and the list goes on, is the age of technological unemployment at hand and will the Covid-19 virus act as an accelerant?
The earlier adopters are weathering the current pandemic better than the technological laggards, we see creativity from the maker communities and early stage start ups no more so than the maker community fighting the Covid virus in Spain. The current pandemic will change the commercial landscape dramatically, there will be shift with many new organisations replacing the technological laggards.
We will all feel the pain and suffering in the short term, my prediction however is that automation through AI will now accelerate faster then previously thought. Governments will need to consider adopting elements of a Milton Friedman like approach to wellbeing. To be clear I am not promoting a socialist agenda far from it I firmly favour free market economics however this unprecedented shift will require us to reconsider the norms.
It is my profound hope that from the ashes of the current pandemic a phoenix will rise, our activities will shift and society and community will improve. Be safe look after those around you and lets remain relentlessly optimistic.