PRODUCT DEVELOPMENT
Bringing a successful product to the market takes more than engineering, research and development, and solid manufacturing capabilities. It should start with understanding the market you plan to sell your product to, what products it will compete with and what customers need that the current options do not address. Unfortunately, many companies focus too much on the product, not on the customer's needs and wants. Let our team help you do critical competitive analysis and market research to ensure you do not waste your vital resources.
Every company wants continued sales, revenues, and profit growth, but what is the best path to obtain this goal? This question has plagued executives responsible for revenue generation for decades. Back in 1957, an applied mathematician and business manager, H Igor Ansoff, created a matrix to understand better the options and risks associated with growing a business. The Matrix, while simple, does an excellent job of providing four distinct strategies to create increased sales. They are as follows: (In order of less risky to riskier)
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Market Penetration
This tactic is the least risky option, focusing your energy and resources on increasing sales of existing products to an existing market. It takes an open mind and asking the right questions to determine if your sales and marketing activities provide the expected results. You might also need to do a pricing review to see if your products are competitively priced in the marketplace and make adjustments to attract new customers. Sometimes the development of a new product might not be the best option. Maybe acquiring a competitor in the same marketplace could gain new products and sales without needing costly product development.
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Product Development
This strategy is riskier and time-consuming but focuses on developing new products to cater to an existing market. This strategy can be done in several ways but typically involves extensive research and development and expanding the company's product mix. This approach might be developing a new battery model that compliments your existing product mix and offers your customers another option. It is also possible to form a strategic partnership with another company to gain access to the partner's distribution channel or brand name.
Market Development
This approach typically means a company enters a new market with its existing product mix. This strategy might be as simple as a regional company expanding its efforts nationally, or it might be focusing on another country entirely. In the new global economy, it has become easier for companies to enter an international business, but don't expect it to be easy. There are significant differences in business culture, customer expectations, compliance, and legal considerations. Our team can help you navigate this tricky landscape and assure you do not waste precious time and resources.
Diversification
In this strategy, the company enters a new market with a new product. While this is the riskiest approach in the Ansoff Matrix, it also can yield the highest growth potential as the company gains access to an entirely new revenue stream. There are ways that you can mitigate risk when considering this approach. Our team can help you find the proper synergies between your existing business and the new products and markets. This alignment will keep your teams focused on why the new product or market is important and aligns with the company's overall strengths and growth vision. This exercise will not only limit risk but also assure that your marketing and sales team will participate from the start of the process.