Market Penetration Can Be Much Powerful with Disruptive Innovation... - What Will You Do?
You may have come across a name, Igor Ansoff, a Russian-born & Russian-American mathematician and business theorist. He is best known for his work in #strategic management, particularly for his development of the 'Ansoff Growth Matrix', which is a framework used for assessing a company's product and market growth strategies.
Ansoff is considered as father of strategic management and he made a significant impact on the field and his matrix has been widely adopted by businesses and academics around the world.
Market Penetration through Disruptive Innovation:
Market penetration is the process of increasing market share by introducing a product or service into a market and capturing a larger portion of the market share. Disruptive innovation is a strategy that can be used to penetrate a market by offering a new and better product or service that eventually displaces established competitors.
In short, this strategy involves increasing the sales volume of existing products or services in an existing market, and involves attracting new customers, retaining existing ones, and increasing sales revenue.
This is often the lowest risk of the four strategies covered by Ansoff Growth Matrix.
Let’s explore how #market penetration can become very powerful when disruptive innovation strategies are plugged in.
Identify Underserved Markets
Market penetration with disruptive innovation often begins by serving a niche market that is underserved or overlooked by established competitors. By identifying underserved markets, businesses can focus on developing products or services that meet the unique needs of these markets.
For example, Tesla penetrated and disrupted the automotive industry by focusing on the electric car market, which was underserved by established competitors. By offering a high-performance electric car with a sleek design, Tesla was able to penetrate the market and eventually disrupt the automotive industry.
Embrace Emerging Technologies
Disruptive innovation often involves the use of emerging technologies to develop new products or services. By embracing emerging technologies, businesses can create products or services that are faster, better, and cheaper than those offered by established competitors.
For example, Airbnb disrupted the hospitality industry by using emerging technologies to create a platform that connects travelers with hosts who offer unique and affordable accommodations. By embracing emerging technologies, #Airbnb was able to disrupt the market and eventually become a mainstream player in the hospitality industry.
Develop a Culture of Innovation
Disruptive innovation requires a culture of innovation that encourages experimentation and risk-taking. By developing a culture of innovation, businesses can create an environment that fosters creativity and encourages employees to think outside the box.
For example, Google has a culture of innovation that encourages employees to spend about 20% of their time on side projects that may eventually become mainstream products or services. By fostering a culture of #innovation, #Google has been able to develop new products and services that have disrupted the market and penetrated new markets.
Partner with Disruptive Startups
Disruptive startups often have innovative technologies or business models that can be leveraged by established businesses to disrupt the market and penetrate new markets. By partnering with #disruptive startups, established businesses can access innovative technologies or #businessmodels that can help them disrupt the market and penetrate new markets.
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For example, Amazon disrupted the retail industry by acquiring #Zappos, a disruptive startup that had developed a new business model for selling shoes online. By leveraging Zappos' innovative business model, #Amazon was able to disrupt the market and become a dominant player in the retail industry.
Focus on Customer Needs
Disruptive innovation requires a focus on customer needs and a willingness to adapt to changing customer preferences. By focusing on customer needs and preferences, businesses can create products or services that meet the evolving needs of customers and disrupt the market.
For example, Apple disrupted the music industry by focusing on customer needs and preferences for music players that were easy to use and had a sleek design. By creating the iPod, #Apple was able to disrupt the market and eventually become a dominant player in the music industry.
Build Customer Loyalty
Another disruption you can bring by building customer loyalty which is critical to leveraging your current clients and penetrate the market. Loyal customers are more likely to make repeat purchases, refer your business to others, and provide valuable feedback that can help you improve your products or services.
One way to build customer loyalty is to offer incentives for repeat purchases or referrals. For example, you could offer a discount or reward points for every purchase a customer makes or for referring a new customer to your business.
Southwest Airlines has built a loyal customer base through its focus on low prices and excellent customer service. The airline provides customers with affordable tickets and does not charge extra fees for things like checked bags or flight changes. Additionally, Southwest's customer service team is known for its friendly and helpful approach, which further strengthens customer loyalty.
Embracing Automation and Artificial Intelligence
Finally, tech and software businesses can leverage their current clients by embracing automation and artificial intelligence (AI). Automation and AI can help businesses streamline their processes, reduce costs, and provide a higher level of service to their customers.
For example, #chatbots can be used to provide automated customer support, and machine learning algorithms can be used to personalize recommendations and product offerings.
Embracing automation and AI can also help businesses stay competitive and disruptive in a rapidly changing industry. By leveraging these technologies, businesses can provide a more efficient and effective service to their customers, which can lead to better market penetration through increased customer satisfaction and loyalty.
Finally, market penetration using disruptive innovation can be very powerful for businesses looking to offer a new and better product or services, especially when competing against incumbents and really want to position differently. Although it requires a willingness to take risks, experiment, and adapt to changing customer preferences, with the right approach and mindset, businesses can successfully penetrate the markets and become dominant players in their industries.
We have been helping businesses to disrupt their industry using our 9 steps model, please get in touch if you like to discuss how you can do so!