Help to Grow: Management Course | Kingston University

Leading by changing the rules of the games

In the quest to create new wealth, world top businesses  have applied unconventional strategies and innovative approaches. This would not have been possible without questioning the existing business strategy frameworks and radically changing the basis of their competition in their industries.

But what motivates a leadership team to get on a strategic transformation in the first place?

For some businesses, it is a threat from a disruptive competitor or environment such as Covid-19 and sometimes, businesses get on the bandwagon of global megatrends – one of those roadblocks when you are forced into a certain direction to survive.

However, strategic thinking and systematic planning for the future are perhaps one of the most imperative driving forces for wealthy companies why they introduce a core business to disruptive transformations while paving a path for new growth. It is surely an uncomfortable place for a business and its people to be  in but it is also the most fertile.

In order to better understand the transformations and the derivatives behind them, the Innosight research team came up with a methodology to evaluate strategic change efforts. In their research, they aimed towards the best practices across industries instead of being blindfolded by the metrics such as market value, revenue, or subjective and generic assessments such as ‘most innovative’. They name 3 methodologies to determine the legitimacy of innovation and transformation a business has achieved.

The first of them is New growth. Investigating quantifiable growth and questioning, has the business achieved measurable success at creating new products, services, markets and new business models? Using their primary metric which is the percentages of revenue outside the core, they look at the percent of revenue that falls out of their existing core growth areas.

Second of that is Repositioning the core. As the title suggests, it is to investigate whether the transformation reflecting from what the numbers has come from the applied change or is it still stinking old? An important question, how effectively the company transformed its old and core into a disrupted and new.

Lastly, Financials. If the numbers are not proposing the new growth, we may have a problem there in the long run if not the short. Has the return rate been reflected in the new areas? What is their market performance?  Have losses been recovered? Is it on a slow growth to revive the business? How are their new products or services performing on their balance sheet?

What questions are you asking?

Winning New Markets

Winning new markets is all about innovative and strategic thinking. It’s obvious to look at what your competitors are doing, but do you also know what your business’ substitutes sectors are? You understand who you are selling to, but have you also explored across the chain of buyers?

Back in 2011, UK’ biggest book retailer was struggling to keep its head up, drowning in the sea of defeated sales and entering the blackhole of bankruptcy, until something happened.

James Daunt, an investment banking professional, owner of Daunt books then took charge of the book retailer chain and rewrote the story of Waterstones’ success.

What did he do to combat bankruptcy and how did he do it?

Along with several changes as small as the presentation of a bookshelf and as big and complex as rethinking the business model and cutting head office cost; Waterstones was competing with the then-emerging phenomena of eBooks readership. As the eBook sales were soaring, the physical books sales were dropping. It is then Daunt identified an untapped market which was looking across complimentary products and services.

This untapped market was comprised of cafegoers and coffee-drinkers.

So, Daunt focused on opening their own independent-looking cafés and kissed-goodbye to costa. This alone has attracted a big and consistent influx of people into their bookstores and saved Waterstones from the brink of bankruptcy. In the last decade, Waterstones has expanded to over 300 bookstores and hundreds of its own cafes. This has been an important yet un-highlighted strategic offerings of food and beverages of Waterstones.

There were questions which required innovative solutions.

How can we bring a potential buyer inside the bookshop who wouldn’t normally go? Rethinking ways to get to customers.

Who is our customer? Reimagining the potential target market.

And,

How can we add value to existing visitors who are buying our books but due to an added value, they would be willing to spend more, buy more, connect more? Looking across the emotional appeal to buyers.

The famous high street book retailer has also opened several independent bookshops without using its branding to expand its target market from book-buyers to small and independent bookshop supportive buyers. It has expanded dramatically and has also gone international.

So now the questions for you being an SME leader,

Where is your business standing?

Have you explored creating a new market for your business?

Learn more about internationalisation and winning new markets in our Module 3.

(kingstonuniversitybusinesstraining.com)