Hey guys! I hope you are great, I am fine. People always like to ask me what I get down to business wise outside my day job. Well in this article you will get a good idea of what I do. I have certain goals in my life, and most of them involve having a lot of money. I want to own my own successful enterprise(s), take care of my family and be a philanthropist among other things. Peter Drucker said, ‘The best way to predict the future is to create it.’ I am trying to create my future through my startups. I actually started out with one startup and now I have 3 small ones. The fact that I now have 3, when I had planned to have one, is a consequence on how I am assessing and managing the growth of my first start up, which is Plexis Strategy. Assessing growth opportunities involves planning new businesses, downsizing, or terminating older businesses. The company’s plans for existing businesses allow it to project total sales and profits. If there is a gap between future desired sales and projected sales, corporate management will have to develop or acquire new businesses to fill it (Destinydawnmarie.blogspot.com). Last week we talked about how to define your business. Read on to see how you can make sure, though a startup strategy plan that the business will get you where you want to go.
The Strategic Planning Gap. I have goals in my life, and to attain these goals I have to constantly monitor my businesses though my startup strategy plan to ensure that they give me the desired results. Rolls Royce Wraith, anyone?
In the introduction I mentioned some of my goals. Every time I assess my businesses in my startup strategy plan I try to see if they are going to get me there, based on the facts on the ground, and not predictions and wishful thinking. The words of the great Lao Tzu sum up my approach pretty nicely, ‘Those who have knowledge, don’t predict. Those who predict, don’t have knowledge.’ I believe I have knowledge. The Strategic Planning Gap is the evaluation of the difference between a desired outcome and an actual outcome in a startup strategy plan. This difference is called a gap. Strategic Gap Analysis attempts to determine what a company should do differently to achieve a particular goal by looking at the time frame, management, budget and other factors to determine where shortcomings lie. After conducting this analysis, the company should develop an implementation plan to eliminate the gaps (Investopedia). When I was assessing and managing the growth of Plexis Strategy in my startup strategy plan, I noticed some gaps, let us see how I am trying to address these gaps so as to ensure that my startups grow at the rate that I want them to grow according to my startup strategy plan.
When I started Plexis Strategy the idea in my startup strategy plan was (and still is) to become a marketing consultant. I offer value to the market by coming into your business and helping you to make more money, full stop. When I was conducting my Strategic Gap Analysis in my startup strategy plan I realised that a few issues were going to prevent me from achieving my goals in the targeted time frame. These issues, among others, are:
- The lack of experience outside the organisation that I work for will make it difficult to get consulting jobs as companies look for experience
- The state of the Zimbabwean economy means companies are unable to afford consultants generally
- As a follow up to the point above those that who can afford consultants do not have Marketing Consultants at the top of their lists. One probable cause is that the business consultants that they have dealt with before have not given them the desired results. Another reason is that our business culture in Zimbabwe is biased more toward using consultants that you are required to use at law, for example, auditors.
- For me to produce stellar results for a company a lot of factors would be involved, including them letting me control quite a big chunk of their operations. I do not blame them for thinking that a rookie consultant should not be given control of a company’s operations
Looking at factors such as these led me to the scientific conclusion that Plexis Strategy, alone, would not get me where I wanted to be in the time frame stipulated by my startup strategy plan. I am going to have to build a reputation for myself as a consultant and change people’s perception towards Plexis Strategy quickly so that I can be given the necessary platform from which I will change lives. I know how to change perception, but changing perceptions at the rate that I want to needs money. So, what am I to do?
Plexis Strategy – My first startup. It will change Zimbabwe, for the better.
The first, and most obvious thought, would have been to move into another line of business but Plexis Strategy has what I can even call a divine role to play in the Zimbabwean economy, it will not be shut down. I decided to see how best I could ensure that Plexis Strategy helped the nation, and helped me, at the same time.
Intensive growth is a strategy of ‘aggregation’ or expansion under which growth is achieved by expanding the scale of operations. This strategy involves the expansion of a firm’s product range and market (Answers.com).
The first stop was to look at the possibility of using the intensive growth strategies. These are represented by the curve on the bottom on our Strategic Planning Gap. The curve that is marked ‘Current Portfolio.’ Enter the Ansoff Matrix.
The Ansoff Matrix shows you how you can grow your businesses in 3 different ways. So, which route did I take?
The Ansoff Matrix is a strategic planning tool that provides a framework to help executives, senior managers and marketers devise strategies for future growth. It is named after Russian American Igor Ansoff, who came up with the concept (Wikipedia). I started by looking at the possibility of me using a Market Penetration Strategy.
Market Penetration Strategy
A Market Penetration Strategy is a strategy that aims to seek increased sales of the present products in the present markets through more aggressive promotion and distribution. The firms try to penetrate deeper into the market to increase its market share. More money is spent on advertising and sales promotion to increase sales volume (Answers.com). In our image above that is shown by ‘Existing Markets – Existing Products.’
The first consideration was to gain some market share with my current offerings. Trust me when I say that in terms of taking my brand to the market, I have not yet even started. I can increase my presence both online and on the ground in the blink of an eye. The reason why I am not doing so is because I do not yet have the clout that I need to be able to charge $100 000 per consult. Such figures would let me achieve my targets using Plexis Strategy alone. I do not have the clout as I do not have the track record yet, and very few people are willing to bet on a rookie. I will deal with that issue in due course, there is no problem there. I can gain a lot of market share by charging $200 or $300 per gig but from a financial perspective my targets will be missed. It would be better to start at $5000 for a project but people are not willing to pay that much, yet.
The growth that I have seen with Plexis Strategy thus far is in terms of my reputation. I am now recognised as a marketing brand and the inquiries that keep rolling in are testimony of that. That was my first goal in my startup strategy plan and it has been attained, to some extent. I will capitalise on that later, but I need a plan for now. Market Penetration Strategy, out!
Market Development Strategy
This strategy aims to increase sales volumes by selling the present products to new markets. For example, Pepsi Cola has achieved growth by capturing foreign markets. The existing product is pushed into new markets by changing its packaging, brand name, etc. (Answers.com). In our image above that is shown by ‘New Markets – Existing Products.’
The next step was for me to see if I could develop new markets for my services. Right now I am concentrating on Zimbabwe even though a gig in another country would be more than welcome. To date my sphere of influence has spread as far as Bahrain, I had a meeting with some business people from there who are in the country about one and a half weeks ago. In the region I have made valuable connections in Namibia, South Africa and Botswana. I have developed connections in these countries mainly because of Zimbabwean nationals who reside in these countries. This was not really part of my startup strategy plan but its a welcome development.
Under the marketing development strategy I could then deliberately target these market through advertising. The problem would still be the lack of experience outside my parent firm. So out with that growth strategy.
Product Development Strategy
Under this strategy, a business seeks to grow by developing new or improved products for the present markets. The current product may be replaced or the improved products may be introduced in addition to the existing products. The introduction of ‘Colgate Gel’ by Colgate Palmolive (India) Ltd is an example in this regard. (Answers.com)
I could look into consulting on different topics outside marketing and strategy by branching into what I can call ‘more popular’ disciplines like accounting. I am not an accounting professional but I could join forces with accounting professionals with them doing the dirty work while I bring in the business and manage the strategy of the firm. Here comes that problem again:
- The experience is lacking
- Even if I was to switch to accounting which types of accountants would want to work for a firm which does not yet have a heritage? Probably the young accountants who also do not have experience and do not have a job.
These factors bring me back to square one. Take a look at the image below:
Those are some of the requirements of a firm that is looking for consultants. Do you see the amount of experience that is required? I do not blame them for it is hard to bet on inexperience, especially when there are so many stakeholders involved.
Based on the image above and a whole lot of evidence that is strewn everywhere. I hope you understand why I will not use this growth strategy as of now.
As you can see in order for me to attain my goals within the target time Plexis Strategy has to be supported by other initiatives. This means pursuing growth strategies other than the ones that I have talked about today. I do not have enough clout yet to penetrate the market using the market penetration strategy whilst charging rates that will enable me to meet my revenue targets. I also do not have the consulting experience that is required to enter new markets and be able to charge the required rates. The same issue has made me shy away from using the product development strategy to grow my business as of now.
The question you would be asking then is, now what? I will talk about that in Part B of the article. There is always an answer, and a way, because providing solutions is the job of a strategist. Which of these growth strategies have you used to date? How have they worked for you? Let’s discuss.