Spot the opportunity
Sep 27 2012, 19:58 | By Entrepreneur
By Ravi Kiran
In earlier columns, we tried classifying reasons to grow your business into needs and opportunities. Evidence shows that businesses that start from a strong and relevant need, when built well, last a long time and thrive well. Then there are opportunities which can be viewed through a simple thinking framework-Customers, Competition, Components and Collaboration. Let's discuss some of them here.
A. Customers: Customers are, and should be, at the heart of every business, which is why many growth opportunities come from understanding them.
i. Maruti 800 and Tortoise mosquito coil struck when customer needs were unfulfilled.
ii. Nirma, Hyundai Santro and Air Deccan built massive brands by tapping into the underserved market segment.
iii. Hyundai Accent ventured into the aspiring market segment and thus makes profits.
B. Competition: Every business competes against others to fulfill a customer need better.
i. Is your competition weak or unstable? Attacking a weak rival isn't 'unfair', it's a responsibility to customers and business. This is what Kingfisher Airlines did to Indian Airlines and how IndiGo benefitted against Kingfisher Airlines and JetLite, later.
ii. Is competition overcharging customers? Usually, monopolistic companies are waiting for an attack from a nimble, customer-focused rival.
C. Components: Availability and price of resources and infrastructure
i. Raw material and components: Can you help suppliers survive in tough times and can they pay back by charging you less? Can you integrate forward like Amul did, by leveraging strong supply side opportunities?
ii. Talent: Are good people under pressure in a tight job market? Is there a college or technical school nearby from where you can hire people?
iii. Finance: Will lenders or risk capital owners soften their terms? Will they make more finances available for well run-companies? Companies like Prakash Snacks and Ashoka Buildcon have attracted risk capital in recent times to grow.
iv. Regulations: Has there been some business-friendly changes in the regulatory environment? Think Bharti. Think of wine taverns in Bengaluru. Think infrastructure companies.
i. An eager strategic partner: Is an established and large company trying to enter your geography and looking for a partner? Entire sectors such as the insurance space have grown this way.
ii. Smart people: Got ambitious and entrepreneurial people in your organization-people who are called intrapreneurs? Would you rather lose them to competition or use them to create a new line of business? Google, HCL and others run strong intrapreneurship programs. You?
iii. R&D: Is there a technical institute nearby which has invented a new product? Has a supplier come up with a new idea? Can you collaborate with them and take the product to market? India is weak here; that is your opportunity.
They say opportunities abound in our world; but most come with an invisible 'best before' date. That's why we use the phrase 'window of opportunity'. Modern management practice has frameworks to identify opportunities for you to decide whether to take the opportunity or pass it up.
© Entrepreneur India September 2012
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