I was on a panel at a marketing gathering as the reality of the Great Recession started to settle in and I heard a number of my colleagues speaking about going for growth.
Growth is good. So what’s wrong with that?
Having been in businesses that were growing and others that were not, the choice is clear!
The question for the room, and perhaps in many corporate conference rooms when reviewing multi-year business plans: Is growth a strategy?
Let’s set aside the element of timing, which brings into consideration that an opportunity becomes less and less attractive as more and more entrants realize there’s a growth market and bring their solutions to the market (driving down price and margin and driving up competitive intensity and commercialization costs). Let’s assume for a moment that your firm’s market intelligence is superior and the opportunity has been identified early in the product adoption lifecycle.
So if we can reasonably go after this growth opportunity, why shouldn’t we?
Well maybe we should…but in these instances my inner Michael Porter begins to speak.
If all you’re trying to do is essentially the same thing as your rivals, then it’s unlikely that you’ll be very successful.
Strategy is about making choices, trade-offs; it’s about deliberately choosing to be different.
Innovation is the central issue in economic prosperity.
What struck me when the panel was speaking about marketing and strategy in this ‘reset economy’ was that there was no conversation regarding the fit of the growth opportunity with the unique capabilities or identity of the firm.
Unique insights, technology, channels, etc. that allow us to provide an offering that provides better value to the customer than the competition could the be basis of a good growth opportunity. Can you solve a customer problem with a solution that is not easily duplicated or replaced? Does your solution not only provide value in itself, but does it provide cascading benefit to your entire portfolio by being a meaningful extension?
What about your brand?
Whatever homework you did (or didn’t do) in support of your brand prior to the Great Recession is paying off now, as customers have retreated to more trusted brands. It’s a tough time to move into markets which are outside of the identity you’ve established with existing and potential customers, where initial credibility may be low and customers are seeking the higher ground of known suppliers. And given that firms are spending less on the kinds of advertising and marketing that build brand identity in favor of demand creation, you may not be able to afford the kind of branding building to help establish your firm as a credible supplier, much less drive awareness of a solution from an unexpected provider (which will all impact your solution adoption rate and costs).
My comments on the panel were that growth is not a strategy, that finding the right growth opportunities is fundamental (particularly in the “new normal”), and that these days I’m really listening to my inner Michael Porter.