Growth opportunities are essential for any business that wants to survive and thrive in a competitive market. But how can you identify and evaluate them effectively? In this article, you will learn some practical tools and frameworks that can help you assess the potential and feasibility of different growth options for your business.
A SWOT analysis is a simple but powerful tool that can help you analyze the strengths, weaknesses, opportunities, and threats of your business and its environment. By doing a SWOT analysis, you can identify your core competencies, competitive advantages, gaps, and risks, as well as the external factors that can affect your growth, such as customer needs, market trends, competitors, and regulations. A SWOT analysis can help you prioritize your growth opportunities based on their alignment with your strengths and their attractiveness in terms of market size, profitability, and sustainability.
In case anyone doesn't know, strengths and weaknesses are internal factors while opportunities and threats are external factors. SWOT is a simple and powerful framework, only used rightly. Go deep and brainstorm as many factors as possible.
A simple powerful tool but often underutilized Many people may know innately the inherent strengths of the organization. However, these may not have been collated collectively. Speaking to people in the industry especially peers may throw valuable light on opportunities and threats. Having informal sharing networks with competitors may bring valuable insights pertaining to weakness. Another great way to obtain information is through job interview of potential candidates from competitors and also by engaging start up companies in the industry. While this information leads to formidable insights, it needs to be assimilated & plotted on the SWOT quadrants which many companies may find it difficult. There is no easy way to internalize this!
Ansoff Matrix is a strategic framework that can help you explore four different types of growth opportunities: market penetration, market development, product development, and diversification. Market penetration means increasing your market share in your existing market with your existing products. Market development means entering new markets with your existing products. Product development means creating new products for your existing market. Diversification means creating new products for new markets. Each type of growth opportunity has different levels of risk and reward, depending on the degree of innovation and uncertainty involved. Ansoff Matrix can help you evaluate your growth opportunities based on their fit with your current capabilities and resources, as well as their potential to create value for your customers and stakeholders.
Blue Ocean Strategy We at Quatrro founded by Raman Roy have used Blue Ocean strategy quite effectively. Using this framework, we came up with Knowledge Process Outsourcing (KPO) & Platform based Business Process Management Propositions. The key tenets here were multi-tenanted platforms and assembly line based Business Process Management that led to non linearity in revenues. Using these business principles, we came up with KPO circa 2006 in Mortgage Processing, Platform based Accounting for Small & Medium Enterprise, Knowledge Management for businesses in STM space. All these businesses were successfully unlocked from capital creation perspective over a 10 year period. Blue Ocean Strategy is indeed a very powerful framework.
Lean Canvas is a lean startup tool that can help you validate and test your growth opportunities before investing too much time and money. Lean Canvas is a one-page business model canvas that focuses on the problem, solution, value proposition, customer segments, channels, revenue streams, cost structure, key metrics, and unique value proposition of your growth opportunity. By using Lean Canvas, you can quickly sketch out your assumptions and hypotheses, and then test them with experiments and feedback from your target customers. Lean Canvas can help you evaluate your growth opportunities based on their viability and desirability, as well as their scalability and repeatability.
Growth Funnel is a data-driven framework that can help you optimize and measure your growth opportunities across the customer journey. Growth Funnel consists of four stages: acquisition, activation, retention, and referral. Acquisition means attracting and acquiring new customers. Activation means engaging and delivering value to your customers. Retention means retaining and satisfying your customers. Referral means encouraging and rewarding your customers to refer others. By using Growth Funnel, you can track and analyze the key performance indicators (KPIs) and conversion rates of each stage, and identify the bottlenecks and opportunities for improvement. Growth Funnel can help you evaluate your growth opportunities based on their impact and efficiency, as well as their alignment with your business goals and customer needs.
Have multiple listening channels to collate insights for growth hacking Inside out channel 1. Listen to employees 2. Create ideas bank 3. Engage ex-employees & understand what to do they think. To make this effective, have active company alumni program Outside In Channel 1. Engage partners and motivate them to share industry & competitive intelligence 2. Listen to start up founders 3. Have constant panel of experts - former employees who are retired 4. Seek insights from PE / VC companies partners In essence, have multiple listening channels. My ex employer Tata Group has done well in this space by implementing Facts & Information Based Reverse Engineering of Strategy for Growth Hacking. Tata Ace LCV truck is a good outcome of FIBRES.