Businesses need to constantly innovate to maintain long-term viability. If not, in a rapidly evolving global and economic environment, they can quickly become overtaken by more agile rivals, rendering them obsolete. But, to ensure long-term market relevance and extended profitability, innovation must be underpinned by a detailed understanding of market opportunities, scope of potential growth, and the competitive landscape.
The key to the whole process is insight. In particular, conducting routine market need analysis, analyzing geographic considerations, understanding product fit, and understanding the factors that determine industry leadership can form the basis of effective strategies for building and maintaining business value in both the short- and long-term.
1: Conduct Routine Market Need Analysis
Every business that succeeds over the long-term does so because, at its core, there is a compelling reason for coming to market. That’s why carrying out routine market need analysis should be standard practice for any nascent enterprise. The insight this research provides can be make or break. Leaders need to focus their ongoing analysis on a range of issues, including: why and where there is a need for their product, service or proposition; the potential size of the market opportunity; the current (and anticipated) competition; current and impending industry and governmental regulations; the potential barriers to entry and to growth; and the investment required (among other factors).
Part of the context for this process is the economic environment into which the business will be established and then operate. In conventional circumstances, general economic conditions and indicators are available to guide decision making–are the relevant economies and industries on a pathway to growth, for example?
However, recent experience has also shown that major challenges and opportunities can emerge almost without warning and have a profound impact on the business environment. Companies that become proficient in carrying out routine market need analysis, however, are in a stronger position to understand the impact of emerging challenges and then adapt accordingly.
2: Consider Geographic Variations
Markets vary drastically depending on geography and culture. When considering international expansion, for example, business leaders should not make the mistake of applying local analysis and data to other territories, or assume the reasons for success at home will apply abroad. This remains the case even when there are obvious and apparent factors in common, such as for the US and UK. Scratch the surface and there are many important differences that can affect the ability of a business to grow in new markets.
Instead, products and services should be evaluated to ensure they don’t violate standard practice, local laws and regulations and cultural norms. The market opportunity may be very different abroad compared to home ground, and can determine whether expansion may offer substantial growth opportunities or require unrealistic investment to compete with popular incumbent businesses. When the proposition, timing and planning fall into place, growth in new geographies can be rapid. But success is far from certain, even for businesses with significant domestic presence, such as in the case of Best Buy, whose attempts to crack the UK retail market between 2010-2012 failed completely, with the company forced to retreat to established markets.
3: Evaluate Product Brand Fit
When considering building additional value with a new product or new product iteration, it’s prudent to pay close attention to how the offering fits within the current brand identity, both internally and as it is publicly received.
For instance, if new product or product iteration falls squarely within the current brand image and identity, consider the scope and scale of variation from current product offerings: Is the deviation wide enough to be accepted as a *new* product?
Will it replace the old? Will it supplement the old? How can the business ensure its target audience is willing to spend valuable funds on this new offering?
What’s more, brand identity may need to change over time to match the changing needs. This is potentially a risky undertaking and should only be attempted following a careful cost-benefit analysis of the brand shift, including a plan for the updated go-to-market strategy. This is vital in order to build confidence around the updated product fit and to ensure current and prospective customers support the change.
4: Target Industry Leadership
Many businesses take all of these steps with industry leadership at the core of their mission statement. What better demonstration of long-term value can there be than becoming an acknowledged market leader? But for any company, the ability to execute depends not only on their own capabilities and actions, but on those of their competitors. Given the insight provided by market needs and competitor analysis, leaders must develop an understanding of the projected product path across the competitive landscape.
For instance, are competitors focusing on product innovation with the potential to influence the general direction of the sector? To what extent do rival products or services share a philosophy or route to market and how can any one business stand out? Are there any brands with the potential to become ‘disruptive’?
An understanding of these issues–as much as realistically is possible–will allow businesses to plan a pathway to industry leadership. They can then focus on the uniqueness of their proposition and build out a multi-year product and marketing strategy focusing on growing market share, customer loyalty, innovation, and building value. And it might even provide insights into future trends or possibilities.
For example, a 2019 G2 survey found that 80% of HR employees believed HR tech improved employee attitude towards the company and that 64% expected an increase in spending on HR technologies. Companies that maintained a close eye on market trends might have taken note of the increased reliance upon technologies in HR departments, considered the impact of an increasingly digital landscape within the industry, and gained a slight competitive advantage in the new remote work era of 2020. Maintaining a thorough, holistic understanding of the market and competitive landscape enables both product leadership and industry leadership more broadly.
Flexibility, however, is key. Leaders should be comfortable adjusting product strategy as needed depending upon results from market analysis. For most growing businesses, some level of change is inevitable and is a valuable part of the journey. The same goes for international growth, because industry leadership often relies on expanding targets market and current marketing plans based on the insight gathered from research, modelling, and experience.
Building capabilities and processes around these core considerations can influence both the potential for establishing value and the ability of a business to put it into practice. For leaders planning strategy amidst a new era of global remote work and increasingly remote lifestyle realities, relevant and timely insight can give them the confidence to take informed risks that can fuel growth, set them apart from competitors, and help build valuable brands of which to be proud.