With the Market Returning, How Do You Ensure You Get Your Share?
While the U.S. economy is growing in a lower gear, it is important for U.S business-to-business companies to determine whether they are positioned well in the markets and segments that are moving forward. There are three steps you should take during the transition from recession survival tactics to growth:
- Identify what is motivating upturn and in which segments demand is coming from
- Use customer chains to focus on end user needs
- Earn your way back and position yourself as a contender
Identify What is Motivating Upturn and in Which Segments Demand is Coming From
The drivers of sector growth in this overall modest-growth economy range from dramatic innovation to the use of large amounts of energy in our now low-cost energy environment. In hot industries, segment based on behavior and understand the underlying economic growth drivers. For instance, technology has long been a fast-moving industry, always competing to develop the next big thing. As the economy strengthens, more companies are taking greater risks, such as going public and investing in more expensive innovations. When innovation is the source of customer growth, it is important to understand your role as a supplier in supporting that innovation. Becoming the favored supplier means being the best partner to accomplish innovation. When the driver of your customers’ growth is something more mundane, such as a cost advantage in energy, growth means continuing to be the best at what you have always done for that customer.
Use Customer Chains to Focus on End User Needs
Focusing on end user needs (e.g., a healthcare provider or technology consumer) can facilitate your growth in the upturn and will improve relationships along the customer chain. For example, as the healthcare industry adapts to legislation changes, healthcare providers are looking for more efficient ways to accommodate greater numbers of insured patients. Understanding the different drivers, from insurers and changing patient expectations, can help companies anticipate the need for automation in lab tests and technological improvements in medical devices and software. Apple Inc.’s upcoming launch of the Apple Watch™ straddles two segments–fitness bands, which is a fast-growing market, and luxury accessories, an established segment in which the company hopes to capture younger consumers before its usual competitors.
As companies move into a very different market, such as luxury personal accessories, successful suppliers will be those that can best support a very different business model from that of personal computing and communication devices, regardless of how upscale. Understanding quality demands and choices in smart devices available to end consumers, suppliers can meet both the technological capabilities and look and feel expected by the end consumer.
Earn Your Way Back and Position Yourself as a Contender
After identifying key segments and end user needs, remember what made you successful before the recession, and capitalize on those strengths to build your way back. This back-to-basics approach will lay a foundation from which to innovate in a changing marketplace. This focus on strengths may lead to further capital investment in an established arena or new market entry that improves your customer mix. Determine which existing strengths differentiate you from potential competitors and adapt those strengths to the new market to aid in establishing credibility. For example, as more consumers look for natural cleaning products, established cleaning product companies, such as Clorox and Arm & Hammer, have entered this space by drawing on their key strengths of quality and a well-known and trusted brand.
This post is part of an independent blog, and has not been authorized, sponsored, or otherwise approved by Apple, Inc.