2020: We are officially one month down! That went fast. At the beginning of a new year, most of us are in the process of launching business strategies and feeling excitement about the potential growth ahead. We are thinking about all the possibilities. As the year progresses, and we start to get feedback, we begin to see if our strategies and the associated assumptions were correct.
But how do we set strategies and assumptions in the first place? For most, we start to “scan” the competitive environment to see how we are doing. Are we beating the competition? Winning more deals? Capturing additional market share? Or maybe you have a different metric to define “winning.”
Most strategic planning exercises and their associated tools are predicated on competitive risks. They focus on understanding the current dynamics of our respective industries, including the known players and the established markets. These are great tools and methodologies — you have to understand what is going on in your own backyard. But don’t forget that all the while, the world around you is growing, changing, and impacting your own neighborhood.
What if we stepped back and reframed how we build our strategic planning process. Did we examine our known competitors or did we explore unknown markets? Did we create strategies to understand and beat traditional “competitive risk,” or did we explore the new “market risk” that accompanies less familiar territory?
Your laser focus on existing markets could cost you opportunities to create new ones
The reality is that every industry will mature. None is exempt. If you are not looking for new markets and demand, then your opportunities are limited to incremental growth and preserving the status quo.
Often incumbent industry leaders are happy with the status quo, because they are winning in their traditional market space. But as their industry matures, they usually capture growth by destroying value; they offer more for less, or steal market share from traditional competitors through price cutting or acquisitions. The trade-off: customer experience and innovation can suffer in the process.
So is that truly winning? Your customers will answer that for you…quickly.
Find your people in new markets – they are out there
What if you’re not an incumbent leader, or you want growth beyond the averages?
I have referenced Seth Godin’s book “This is Marketing” a number of times on this blog. There’s a great theme running throughout his book and blog: “People like us do things like this.” The premise is all about connecting with like-minded individuals in the smallest viable market. Very few of us are in a business that has to be everything to everyone — thank goodness. But we tend to plan, strategize and market as if that is the case. Those 6 words simply mean, find your people, find your markets. Look for the demand for what you have to offer.
To do this, you will need to think differently. You will need to have the courage to take on and evaluate different risks — your ability to do so could be your biggest opportunity to drive new growth.
Maybe you need to make some bets on market risk — the risk of unknown demand. It can be daunting to explore new areas for unfilled and unmet needs, and perhaps those needs are not yet understood or documented. Your risk in this type of strategy is not about losing to or beating the “competition;” it is more focused on new demand, and identifying whether there is a new market to be had.
Will your traditional market share strategy keep you relevant?
I’m not suggesting you abandon the strategic planning and associated tools that go with competitive risk, but I am suggesting you also find time to experiment with market risk. Think about the company’s “non-consumers,” those you do not currently sell to because you do not think they are “your market.” Can you create new demand with them? Are there people in those markets like us, who want to do things like this? The reality is those people are out there, beyond your traditional space. It just takes a little work to find them.
Yes, you can chase growth by capturing more market share at lower prices. It may get you a short-term win, but I don’t believe it will keep you relevant for the long term. Instead of strategizing around the known competition, try strategizing around an unknown or unproven market.