In fact, there
are only 3 ways
to grow a business
By Yohan Albo
As part of my business advisory practice to executives and boards, I need to be sharp and to deliver value fast. People around the table need to feel from the first few minutes that they made a good decision seeking external advice… Leveraging a practical business framework, it is essential for me to listen, structure my thoughts, ask the right questions, and drive the energies in the room toward value generation around the specific business problem the management team needs to solve; whether it be picking a growth strategy, assessing market scenarios, selecting a strategic supporting software, protecting a given revenue stream, or the potential acquisition of a competitor…
Most business books describe complex and abstract theories, processes, and analytical frameworks about how to approach and address a specific business problem. When it comes to growing a business, if someone comes to you with very complex methods and recommendations, know that that’s a bunch of horse crap…
“In fact, there are only 3 ways to grow a business… no complex theories… no BS… and here is what you need to know…“
Increase market share
In a stagnant or declining market, the only way to grow a business while continuing to focus on an existing service/product line-up is to take market share from competitors. When you know that, your life becomes easier. You know exactly where your focus should be. If your overall market size (your playground) is growing, then you are in better shape and have more strategic freedom of choice. You need to decide whether growing with the market is enough, or whether reinforcing the leverage effect and being offensive toward your competitors’ pieces of the cake is correct. (For instance, by acquiring a direct competitor, building strategic downstream or upstream alliances, better communicating your competitive advantages, improving your distribution and reach, or even disrupting a bit your business model while continuing to provide similar value to the end-customer). You may ask yourself why a firm would not actively invest to increase its market share… If the decision makers at the firm act in a strategic manner and have a clear vision, there could be many reasons why: an incremental strategic move into a new market, deep understanding of the industry life cycle, awareness of the company life cycle, and more.
Grow with the market
As mentioned above, if you are lucky enough and your market is growing, you can decide to take the wave and grow with your own market. In this case, the business challenges you need to address are more in the area of organic scale-up and how to best protect your cheese in this given area. Note that being in a growing market is not a safe haven… you will still need to continue working hard to deliver value to your clients. Deciding to grow with the market in terms of revenues during a given period could be the perfect time for the management team to focus on improving profitability by investing time, energy and resources in sourcing, cost, and productivity optimization activities.
Expand into a new market
Diversifying is an excellent growth strategy, as it allows you to have multiple streams of income that can often fill seasonal voids. In some cases, expanding into a new market is a must based on evolving factors in the space you currently operate in. If this option is being assessed, then the discussions will be around which markets will be a good fit for the firm based on its current assets and culture? What could be the expected payback? What are the steps required in terms of execution? Which assets/capability will need to be organically nurtured or acquired from outside of the company? How to maximize the revenues from the existing activities while the resources and the attention of the firm may be focused in the new areas?
Is this mini-framework applicable to for-profit businesses of any size and/or from any industry? Yes, and this is the magic of it. Proven in many start-ups, small businesses and business units in large corporations I’ve worked for.
Being aware of these 3 vectors will help decision-makers ask themselves the right next questions and focus on which needs to achieve based on the strategic vectors selected.
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DataToCapital is a boutique management consulting firm that supports global tier-1 firms and start-up companies operating in Israel in their route to excellence and market dominance. Our core services, designed for CEOs, Executives (VP-level and above) and Entrepreneurs, can be divided into three areas: Market Intelligence, Corporate and Product Strategy, and Execution Support on top-down strategic initiatives.
The quality of the work we deliver in the three areas mentioned above is equivalent to what your company may already get from the top-3 consulting firms that operate in the Israeli market, BUT here’s the twist and why our tier-1 clients think we are superior.
We don’t only provide smart recommendations, we work closely with the management team and can also support driving the execution of their strategic initiatives behind the scenes or as a proxy.
We are at the strategic intersection of Business and Technology. Thanks to our rich background, we know how to connect the dots between the two worlds, and how to be very creative when it comes to disrupting business models or addressing sub-optimized processes with the help of advanced technological solutions (Machine Learning, Big Data, Data Visualization, Enterprise Software Solutions, and many other tools present in our toolbox).
This is a built-in feature.
No account manager, no complex communication chain, etc...
This is why our firm aims to dominate the management consulting market in Israel with no more than eight talents (...on steroids).
Our long-term vision is to become the trusted advisor to the most influential businesses and institutions operating in Israel, and help them become global leaders in their markets.