The sweet spot is the intersection of the organization’s unique capabilities and select customer needs. You know that businesses can’t be everything to everybody, and yet defining a focus is very hard for most of us to do. Having great knowledge of the market makes this step so much easier.
What you don’t know will hurt you.
After a thorough study of the market with an outside-in perspective you know a great deal; which segments of the market are growing, where there is open space for a competitive play, which competitors are doing well, which customers you can make money on, what your strengths are, what new technology is coming, and how all of these things will impact your business and industry. If you don’t know those things yet, well, that should be your mission.
Think big, and think differently
Armed with market knowledge, no option that can accelerate business performance is too big or too crazy. Examine all areas of potential growth such as new customers, new products, new channels, new marketing, or new processes.
Involve people you may not normally include in strategy sessions such as customers, vendors, salespeople or neighbors. Customers can often give you product feedback. Sales people can provide insight on customer needs and anticipated responses, as well as insight on potential markets to consider. Even your neighbors may have an interesting idea that solves a problem. Talk to anyone and everyone so you can consider a range of options.
Find the intersection of needs and capability
Pay special attention to identifying options in the space where the market needs are a good fit with company capabilities. It is this space that is rich in new opportunities that are especially good for your organization.
Not all customer needs fall into the sweet spot for new opportunities. Most don’t. Neither is the organization leveraging all capabilities; just those that are better or different in solving the specific needs of the targeted customer. This intersection is the spark that reignites, driving growth and overcoming bumps in the road.
Start with two lists
How do you decide which needs and capabilities to focus on? It is admittedly part science and part art. Make a list of the top market needs and the top company capabilities. Look at the two lists together and begin to draw associations between them:
- How can a capability solve a need better than it is met today?
- How can a need benefit from a capability being applied to it in a new and different way?
This is an iterative process, and it will begin to open up opportunities to deploy strengths to better meet needs than has been done in the past.
Often, there is no rocket science, no new invention, no heavy R&D; the opportunities already exist. The company just didn’t see them before because they weren’t consistent with traditional business practice and behavior.
A simple idea may be big!
Sometimes breakthrough opportunities are as simple as putting wheels on luggage. In 1972, Bernard Sadow invented the concept. Think about it. Wheels were invented around 8000 BC. While man had found numerous ways to avoid being a pack animal in just about every conceivable situation, we still lugged our own bags through airports.
At first, Sadow was reidiculed by luggage buyers who knew their customers wouldn’t want any such thing. However, once he got in front of Macy’s VP of Merchandise, a frequent traveler himself, he found interest.
For the first few years after luggage with wheels came on the market, male business travelers resisted it as unmanly, but with the high convenience factor it didn’t take long for its practicality to win them over. My thanks to Sadow for seeing what every other business traveler did not. Find new growth opportunities by solving current common customer problems, whether they ask for it or not.
Applying technology
Another common growth opportunity is to use the latest technology to take a product or service to the next, inevitable level, such as the evolution from TiVo, called “God’s machine” by the FCC Chairman in 2003, giving the power of television to the people, to DIRECTV DVR by 2004, and cutting the cord to choose from multiple streaming services today.
We have seen the internet go mobile, resulting in devices getting smaller and more intelligent. There are few industries that are not substantially impacted by these trends. Our appliances are smart, our security systems are mobile, our news is instantaneous, and our worlds are defined by “likes” and “followers” around the globe. The need to be smarter, faster, and better is everywhere. Have you asked your fellow leaders how you can improve the products and processes of your organization?
What can you do with a watermelon?
Not every opportunity is defined by technology. A manufacturer of food-packaging components identified a trend toward niche markets. Given that they were small and nimble with a good debt position they saw this as an opportunity as they felt they could diversify into some of these smaller and emerging markets more quickly and profitably than others.
Have you read the news articles about the square watermelon? The story begins in Japan where space is at a premium. As you know, watermelons take up a lot of space, whether on grocery store shelves or refrigerator shelves in the home. How would you fix the problem? What can you do with a watermelon, which is just big, round, and cumbersome?
Ask a different question
Real-time solutions would suggest raising prices to accommodate the extra space and make sure adequate return is generated on the retail footage occupied. Or they could precut the watermelons to smaller sizes. Or maybe they could implement lean manufacturing processes to control inventory levels. The Japanese farmers asked a different question. “If supermarkets need a space-efficient watermelon, how can we provide one?
Once they asked the right question, it didn’t take long to generate a solution. As it turns out, you can easily change the shape of a watermelon to be much more efficient. Watermelons retain the shape of the container in which they grow so they grew them in square containers. A square watermelon takes less space, is easier to stack and therefore is less costly to transport and display.
Take it to the next level
Are you asking the right questions? Are you recognizing that fundamental needs for many things have always existed and probably always will? It is the way we solve for those needs that changes over time as technology and trends evolve what is popular and desirable.
It is essential that you identify what fundamental need your company serves and how the organization is or can be uniquely suited to take it to the next level.