8 Clues To Next Breakthrough Strategy
Can market anomalies and incongruities offer clues to the next breakthrough opportunity? Donald Sull, a professor of strategic and international management at the London Business School thinks so. Professor Sull offers eight clues that when rightly recognized can offer an opportunity for next breakthrough strategy within organizations.
According to Sull, managers and entrepreneurs pass up opportunities that otherwise turn lucrative when exploited by others. All such managers can do is regret missing out on such opportunities. Managers can however enhance their skills at identifying hidden opportunities and exploiting them. Major opportunities for growth can be identified behind the following clues;
1. Products that should be in the market, but aren’t
Many great innovations were first conceived as products that ought to exist but were non-existent, be it airplanes, mobile phones, etc. For instance, by combining functionality and design, Kate Brosnahan revolutionized the designer handbag and built an impressive business. Brosnahan leveraged on the lack of functional and fashionable designer bags to quit her job from Mademoiselle Magazine and set up Kate Spade LLC with a partner, Andy Spade. The rest, as they say, is history.
2. Take Consumer Irritation as an opportunity
According to Professor Sull, consumer irritation can serve as an opportunity for breakthrough strategy or innovation. Generally, most consumers are willing to pay to make processes shorter, less arduous and time consuming. Netflix Inc. founder Reed Hastings, was moved to establishing the company after getting a US$40 late fee for a misplaced, rented video cassette. Additionally, fed up with traditional stockbrokers, Charles Schwab established the largest low-cost brokerage house.
3. Low priced resources can still amount to something profit wise
Underpriced resources have a potential to still amount to something profit wise, says Professor Sull. For instance, India’s pioneering outsourcing firm, Infosys Technologies Ltd, leveraged on underpaid Indian engineers to provide solid value to multinationals through outsourcing. The company grew into a global outsourcing major by profiting from the spread between what it charged multinationals and what it paid the Indian engineers.
4. Promising discoveries with no outright proper use
Sometimes, innovators stumble on vital discoveries that have no proper outright use right away. For instance, the innovation of a process called coblation, for the manufacture of medical devices, led to the establishment of Multinational Corporation. At first, the innovator Hira Thapliyal, had no outright use for the process, but through searching for a problem settled on the orthopedics industry that handles over 2 million arthroscopic surgeries annually.
5. Products or services that should be widespread but aren’t
According to Professor Sull, a product or service may be impressive and pioneering but fail to spread out. Spreading this product or service can serve as an opportunity for a breakthrough innovation. For instance, the spread of McDonald’s franchise from humble beginnings in 1954 demonstrates such a spread. The model was behind Starbucks growth from a single retail outlet to world over.
6. Customers find new uses for company products without company support
Haier Group leveraged on customer adaptation of its washing machines to wash vegetables to make a relevant product and capture the rural Chinese market. The company went further and invented a washing machine that turned goat milk into cheese, effectively capturing rural market share without necessarily suffering the barriers of cutthroat prices.
7. Customers shouldn’t want this product (but they do)
Professor Sull demonstrates this by way of Honda’s experience. The company made its entry into the U.S. with bigger motorcycles, targeting riders. However, the move flopped, the big bikes never sold that well. When Honda launched its smaller versions of the bike that its managers had overlooked for the U.S. market, the company’s fortunes were suddenly turned around. Honda had just discovered a market segment that had been overlooked.
8. Successful products or services not available locally
An opportunity can also come from successful products or services that offered elsewhere but not locally. By studying other markets, innovative individuals can find opportunities for starting successful local business along models similar to those elsewhere. For instance, in 1990, Carl August Svensen-Ameln, a Swede, saw an opportunity in the storage industry when he realized there weren’t any self-storage facilities in Europe. He went ahead to set up a business and has since been very successful.
Breakthrough strategies can come from the most unlikely places. Do you agree? Share your thoughts with us!
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