John Mariotti (CEO, The Enterprise Group) blogs in AmEx Innovation about The Search for Growth.
I want to know: What do you see as the key to biz growth? Excerpts below.
“Growth in sales revenue is hard to find these days. …When sales growth is achieved, it often comes without commensurate growth in profits — because the “cost” to get the growth was too great. What to do? Or not do?
Don’t Mistake Proliferation For Innovation.
A lot of the growth that companies have achieved in recent years has come from proliferation of customers, products, locations, etc. …Simply opening new locations only guarantees that there will be more places to manage. Growth, if and when it comes, may not bring profits.
This kind of proliferation-based growth brings with it the risk of wasteful complexity. More of everything is harder to manage, and seldom yields the kind of returns expected. And yet, nearly everyone still does it. Why? Because proliferation is easy, seems logical and often, does lead to increased sales; but it also leads to increased costs and headaches. …
There Are Five Ways To Grow Profitably—Only Five
1. Take share from existing competitors (a tough game)
2. Expand the market with innovative new offerings (not proliferation)
3. Change the mix to sell higher price/value products (surprisingly productive)
4. Enter new market segments or an entirely new market (go back to no. 1-3)
5. Create an entirely new market (e.g., Swiffer dusters or eBay on-line auctions)
Posted by Kathy Sandler on Thursday, November 19, 2009 at 12:01 AM