Is your business stagnant or even declining, yet you struggle to find a solution? Business growth decay is a topic we have discussed in the past, and is an issue many businesses face. There are five big reasons businesses may suffer business growth decay.
1. Stuck in Yesterday’s Success
Your existing markets continue to grow, but your historical success is being attacked by increasing competition, customers who want more for less, and overall evolving business maturity.
2. Held Down by a Stagnant Customer Base
Your product quality is being maintained, but your existing customer base is maturing and becoming increasingly intra-competitive. You can try to overcome your decline by looking to your suppliers for lower prices, but this is a trend that sees no end.
3. Spinning Your Wheels
As your competitive environment becomes more intense, your rivalry intensifies. You try new things, but your competitors quickly follow. The result is new costs without much price or share to go along with it. You may not realize this has happened until it already has.
4. Your “Learning Organization” Withers
Your well-established ways of doing things (your work processes) are starting to let you down. Today’s environment calls for Speed, Agility, and Simplicity. Where to begin the change process is a daunting task.
5. A Bit of All of the Above
Generally, your business challenges for future success are due to some or all of these decay drivers. Wouldn’t it be nice if you knew for which ones to drive a change process that could address multiple issues?
“Grow or Die!” — Stop Business Growth Decay
“Grow or die” has been a long-held axiom that is even more important in today’s increasingly competitive environment. Too often, companies forsake their organic growth strategies for growth through acquisition or price increases, adding to their burden of translating growth into profits. Companies can grow organically in many ways. Here are a few key mechanisms for growth:
- Expand value propositions to leverage existing capabilities to existing markets.
- Find new markets to sell existing and expanded value propositions.
- Bring new products to commercialization faster and more effectively.
- Define a new business model in markets currently served.
- Increase productivity through new work processes and organizational capacity improvements.
Where Do You Go From Here?
Along with the key growth mechanisms described above, there are some fundamental questions you need to ask yourself about your business:
- Do you really know your position in the markets you serve?
- Do the industries you serve have the potential for growth?
- Does your value proposition provide benefits to the most valuable segments?
- Is your pricing strategy optimal, given price sensitivity in your most valuable segments?
- Are your value proposition’s benefits well communicated to your most valuable segments?
- Are your costs higher than your competitors’ costs?
- Do you use a value delivery system that requires different core skills than your competitors?
- Are you underperforming in key processes relative to competitors or customer requirements?
- Do your processes contain steps to build your customer franchise in the highest value segments?
Are you concerned about your business in any of these areas? Let’s talk about it! Leave a comment below or contact us.