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Can’t find growth? Redefine what business you are in!

Your most recent growth strategy failed to find significant growth. You looked at organic and inorganic growth but were not able to find the growth you wanted. Where to look?
Your most recent growth strategy failed to find significant growth. You looked at organic and inorganic growth but were not able to find the growth you wanted. Where to look? In another post, “Can’t find growth? Look beyond your Industry to your Business Ecosystem!” we discussed looking more broadly at your ecosystem.

Another related but different area to explore is redefining what business you are in. How your business is defined reflects your chosen business boundaries and is often embodied in your mission, your vision, the unspoken assumption in every strategic conversation, …. , basically you would say “We are in the _______________ business!”

Business redefinition is an area where you can identify and unlock significant new sources of value yet it is neither easy nor risk free. It would be easy but simplistic to simply broaden the definition that you currently have, say from computers to computing or trucking to transportation. Of course broadening the playing field alone would yield some new growth opportunities but how do you know if you are likely to be able to successfully leverage your business into these new areas?

There are 3 steps to redefining your business:

    Below is a framework that is useful for understanding what options are available:

    Business Definition

    Here is how the process works:

    What is the current definition? Single product in a single segment? Service across an industry? Business Model in a single segment? …

    What is the strategic context? Where do I currently play?

    Ecosystem Analysis
    Trend Analysis
    Economic, Environmental, Geopolitical, Societal, Technological
    Competitor Analysis
    Porter 5 forces

    Strategy Map
    Ecosystem definition
    Value Delivery Systems
    Value Migration
    Strategic Segments
    Customer Value Gaps
    Strategy Map

    Strategic Options

    Where do I currently play? Align the current business definition within the Strategic Context

    What options do I have to redefine my business and which one is the optimal one for me?

    Value: There is increasing value delivered to customers when going from providing products, to services, to solutions, to experiences and to business models. For example, the value of generating a new business model can be 1,000 times greater than delivering a single product.

    Scope: As I increase the breadth of my scope, value captured increases as you serve a single segment, multiple segments, an industry and an entire ecosystem.

    Value and Scope: Capturing value by delivering on both value and breadth.

    Choices include:

      An example will help to illustrate, though we will only focus on some key pieces of the work for brevity.

      Company X in the Hearing Aid Industry currently offering products in multiple segments of the industry. The industry as defined by this player is hearing aid products and solutions. Visually this is where they are playing:

      Value Creation

      The segments from a consumer perspective include people with normal hearing and people who are hearing impaired and from a company perspective segments are users and non-users of hearing aids. Looking more broadly and developing a perspective on the ecosystem, we can add an additional dimension that deals with whether we are interested in hearing correction alone or wanting to look at hearing enhancement also. We can see this visually:

      Ecosystem Mapping

      What now stands out is the opportunity to redefine the business from “Hearing Aids” to “Managing Hearing”. The former includes medical products that focus on correcting hearing deficiencies through advanced technology while the former includes hearing correction and adds products to protect and enhance hearing. The option exists to redefine the business at the product level or to further expand into experience management, adding some additional opportunities to grow value.

      Visually, this is what the scope of the new business definition could looks like.

      Business Redefinition

      Business redefinition is another option in the search for new sources of growth. The key is having a mastery of what is happening in the broader ecosystem, what the business models are and likely to be in the future, whether there are disruptive forces that are at play and whether the ecosystem itself is likely to be redefined in the near future. Finally, you have to be able to deliver strategic options that balance the rewards with the risks.