Exploit Market Changes
Industries and markets are constantly changing for many reasons, including technology, a new business model, or a pandemic.
When this occurs, companies have two choices: adapt to current changes or, longer-term, be disrupted.
But, if you pay attention to these changes, you can develop innovative strategies for revenue growth and exploit these market changes.
That is what we are going to talk about in this blog, how companies react to these changes, how you can adapt your strategy to these changes
to gain product value, revenues, and even a long-term monopoly in your market.
Companies that do not adapt generally resort to inertia or entropy.
What is inertia?
Inertia is the unwillingness of the affected company to adapt.
Not adapting could be caused by routines (the way we have always done things) or an unwillingness to change strategies because it will hurt current profit streams.
They assume that these current profit streams will continue.
However, this also opens up opportunities for others. For example, Netflix replaced Blockbuster. Walmart replaced K-Mart.
What is entropy?
Inertia generally leads to entropy. Entropy is not keeping your product line up to date and, therefore, losing clients, sales, and market share.
The primary reason entropy becomes the problem is that the company becomes less focused on its products,
often reduces prices and generally becomes less responsive to its customers. You might agree with Elon Musk, “I think you should always bear in mind that entropy is not on your side.
Again, entropy opens opportunities for competitors to innovative strategies for revenue growth. Product-market fit is not a permanent status.
For example, the Encyclopedia Britannica was replaced by Wikipedia. Photographic film was replaced by digital cameras.
Innovative Strategies: Examples of Potential Opportunities
Your strategic opportunity is to pay attention to these changes and be willing to innovate your products or services and experiment.
In that case, you can leverage your current strategy.
You can capitalize on these changes with new concepts, ideas, products, or services that should generate new revenues and profits for years to come.
A few examples of potential innovative strategies for revenue growth in market changes are happening today.
Innovative strategies for potential changes in auto Insurance
Every car insurance company says -one way or another- you only pay for what you need.
And there are companies with apps comparing prices. How long can profitability last?
I also realize that much of their money is made on premiums and reinvesting premiums into other interest-paying assets.
But what happens when interest rates change, and the spread collapses?
What happens when car buyers switch from buying cars to subscribing to vehicles?
This concept is just getting started, but the idea is increasing globally.
Just pay a monthly fee and drive off the lot. You have a three-year subscription and can change car models every 12 months.
You subscribe at the dealership, and your monthly subscription includes insurance (they want to protect their asset.)
This concept is new, and I assume changes will be made along the way.
Other opportunities include electric cars, charging stations, gasoline prices, parts costs, and many more.
Is there an opportunity for an innovative strategy for growth, or are insurance companies the next Blockbuster video rental company?
How could you take advantage of these opportunities if you are in this industry?
Innovative strategies for opportunities in the phone market
One telephone service company sells its service for $75 per month,
and another sells the same service with the same coverage for $25 per month.
Are costs plummeting, or are more and more competitors entering the market?
Or are the phone companies still making money on phone sales?
But we see ads claiming you can save about 50 percent on some phones.
Are these companies simply discounting to get updates or new customers
— or calling it the marketing cost of acquiring a new customer who will eventually be profitable over the long term.
Plus, what technological advancements are going to happen? Will SMS messages all become MMS multimedia messages?
Will there be anyone left on laptops? What will happen with 5 G?
How will this evolving industry affect your market, product, or service? And how quickly?
Innovative strategies for opportunities in the real estate market.
Real estate companies continue to reduce their commissions and have gone from 6% commission down to about half that amount.
Companies and agents use marketing companies to get listings and independent agents to sell homes.
This new sales model has dramatically reduced costs.
There have also been new sales models like “ibuyers,” who buy a home in cash with no fees,
spend a few dollars updating the home, and resell the house for a profit. Can this last with higher interest rates and slowing house prices?
Also, many real estate companies own title companies because that is another way to “cross-sell” and increase their sales and profits.
But what if title companies begin using blockchain technology to make title registration faster, easier, and safer –maybe reducing title insurance?
Or what if the real estate agent took the average discount the buyer wanted and gave the buyer a portion of that discount as a “bonus” at closing for buying the house?
That money would be much more valuable to the buyer than the small amount that would reduce the monthly payment.
Considering all the variables that go into the real estate market, how will this market change in the next 3-5 years?
How will the real estate companies deal with all the brick-and-mortar offices across the country?
More changes and opportunities to come
Those few common examples are only the beginning of the changes we will see in the coming years.
For example, what will RoKo streaming television do to cable companies?
Or is Artificial Intelligence taking over more and more tasks?
Or are 3D printers building homes in a couple of days?
The list could be extensive, but you get the idea: everyone is or will be affected by continuous changes in our world.
One way you can deal with these changes is to monitor the changes knowing that some companies
will adapt quickly while others will respond with inertia and/or entropy.
Those companies are easier to identify and give you time
to create and modify your strategy to be the value leader in your industry and market
-and maybe own the monopoly position in a new market niche.
Conclusion
Gain Strategic Leverage From Market Changes
-Market fit continues to evolve and change with the economy and the customer’s needs and wants.
Therefore, stay alert and be ready to take advantage
of the many new opportunities to modify your strategy as required.
Who can argue with Elon Musk’s perception of the future?
He says, “you have to get into a new market several years ahead of the apparent trend to be a player in that market.”
Cheers,
Jim Zitek
PS. If you would like to learn more about business growth strategies,
check out this blog post: Why your business growth story is your story
PPS If you want to get the right information at the right time, check out our website,
