In this post from Claire de Weerdt, she identifies two approaches in growth strategy and asks which is best for your business.
Firstly – hope everyone in the US is having a great thanksgiving weekend and enjoying time with friends and family!
Secondly – I wanted to share an observation I’ve made when it comes to strategy and innovation.
I’m seeing generally two approaches to growth strategy:
The first I will call the “big bang” type of growth strategy. Often leveraged in start-ups and new product lines, the objective here is to target many markets and segments at once and see where traction can be obtained. Advantages are clear for start-ups who have not yet achieved product-market fit, however, this strategy can also be costly and inefficient, as not all customers may be able to provide profit-market fit. It follows more of the entreprenerial “do, learn, repeat” approach – proving out markets by taking action.
The second approach is what you could call “focused”. This approach involves strategically selecting which customer segments / products to allocate resources to based on market fundamentals, competative advantage, portfolio/ecosystem strategy, and profit potential. This is more common in larger/ more mature organizations with resources and knowledge to identify the most attractive markets / segments. It also commonly comes in after a “big bang” approach has been taken to refine strategy and focus on profitability. This is also used in new market growth strategy for established companies.What approach are you taking? Which one makes the most sense for your organization?