Maximize Your Growth Potential
As we know from How to Evaluate the Growth Potential for Your Business, the size and growth rate of your business are important.
In order to get a clear strategy together for growth, we’ll use the Ansoff Matrix. The Ansoff Matrix looks at your business from the standpoint of what existing markets you are in today, and what are potential new markets you might enter, and then we’re going to look at product/service lines.
First, we’ll see what existing products you have to sell today, then what potentially new products/services you could add to the mix. Because what the Ansoff Matrix tells us is that the products and services you sell today into the markets you are already in today, are going to be the lowest risk opportunity for you to grow.
So essentially re-doubling your efforts to execute better at your existing product suite, into your existing markets.
Next, we’re going to look at entering new markets. But know that entering new markets with your existing products is going to be riskier than focusing on existing products in existing markets.
Not surprisingly, you’re entering a new market, and you don’t know that market as well. An equally risky proposition is to stay in your existing markets and create new products and services; that’s where you know the market, you know the people you are selling to, but you don’t necessarily know the new products/services you are thinking of to launch.
Then the riskiest proposition is to enter a new market with a new product.
So as we think about your business, and growing it in the lowest risk fashion:
- We’re going to focus on existing products/services and existing markets.
- Then we’re going to look at potential new markets,
- Then we’re going to look at new products/services.
- For the last option, we might entertain new markets and new products/services, but again know that that is the riskiest proposition.
Maximizing Business Growth Potential
EXAMPLE: Lemonade Stand
Think about the typical lemonade stand in the context of existing markets and new markets, and existing products and new products. Let’s say that selling lemonade in the driveway is selling your existing product, lemonade, into your existing market, people who are walking by your driveway.
If we looked at potentially entering a new market, we might take a jug of lemonade and walk down to the beach and sell it to sunbathers on the beach. Same product, we know how to make the product, we know how to make the lemonade and transport it, we know how to refrigerate it. We know all about the product, but we’re going to a new market (sunbathers on the beach).
Another option for us to grow is to say we are going to stay on the driveway and just focus on the foot traffic walking down the sidewalk (market), and we’re going to add iced tea as a second product to complement our lemonade – new products, existing markets.
The riskiest proposition for us as a lemonade stand would be to go sell iced tea at the beach – It’s a new product we don’t know, and it’s a new market segment we don’t know.
So at Denver Business Coach, that’s what we do – look at the growth opportunities through the lens of what is the lowest risk, highest potential way you can grow your business.
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