Finding Another Avenue for Growth
Where do you find organic growth beyond your current core product lines or services?
In a recent survey of CEOs from large-cap brands, over 65% indicated that within 5 to 7 years, their industry competitors will be different than who they are now. Also, these new competitors will pose a significant market share threat to their core organic business.
A brand’s ability to find alternative sources of revenue will be vital to sustaining its long-term growth, finding another path to building a competitive edge within its core competency.
Over 40% of these brands’ ongoing revenue is projected to come from these new revenue streams, a vision set by the visionary leader who sees what is ahead and creates a path to realizing the future. The main engine for why these small start-ups can quickly become a threat is their ability to scale with little capital, nowhere near what was required in the past. Efficiency has become the new norm, and effective use of capital has become the new avenue to rapid revenue growth. Tools and technology will win for those who understand the opportunity and can quickly adapt to the ever-changing working environment.
Previously brands would incrementally grow revenue through the following means;
• Geo expansion
• Product line extension
• Expanded customer demo
This is the traditional path to generational success. Still, this path has changed, and Brand will now need to find new avenues to maintain their category market share and continual, consistent growth. The growth will be executed by establishing another path and developing a new core business that can tangibly provide sustainable revenues and profitability. For instance, Apple's expansion beyond its core PC business, where they introduced the iPod, iPhone, and iPad, building an incomparable ecosystem. Once completed, moving into watches becomes the industry standard for the digital age.
To determine the viability and opportunity to build this new revenue path, I have found four key foundational elements that are needed to measure potential success:
• Define a Market with a Large, Sustainable Profit opportunity, and ensure you find a market where the potential for revenue growth within the new path outstrips the base core business. This can be achieved through strategic, complementary acquisition.
• Have a Sustainable Competitive Advantage. After defining the market, ensure you have an immediate competitive advantage over the incumbents, such as Amazon, with their AWS segment. The defined point of difference will be critical to providing value beyond the product to your customers.
• Be an Entrepreneur. Big brands forget what it is like to be an Entrepreneur. They have been in the ivory towers too long, and they need to understand what it is like to be; agile and fearless yet frugal. Only those who have been in that seat understand.
• Leverage current core capabilities, you are not starting from scratch, but you must be able to leverage existing assets and resources. This will provide much-needed velocity to the integration and implementation timeline.
Each of these by itself is never as good as all four working in unison. Therefore, to achieve sustainable growth, you must embrace the vision of finding a new, complementary path to success.
Stay True, stay Authentic, be Different, be Great!
Enjoy the Journey!