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The only way is UP!

Many businesses are in the midst of a dilemma at the moment: Stay put or Scale up?

While some are comfortable maintaining the status quo, others are keen to explore new markets and expand their customer base.

As Mark Zuckerberg rightly said, ‘In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks’.

So how do businesses grow in a highly competitive market? How does a start-up created in your garage become a nationally recognised brand?

Let’s take a look at TurmeriX.

Errol McClelland, the founder of TurmeriX, was looking for natural solutions to help treat his arthritis. He stumbled upon the benefits of turmeric and realised the potential for a business opportunity.

Wanting to share his story with others, he went about developing turmeric-based blends and mixtures to promote healthier eating habits. The company that started off as a stall in a food market, has now grown nationwide and is expanding internationally.

In an article with SmartCompany, Mr. McClelland highlights what it takes for businesses to scale and grow. Initial interactions between him and his customers revolved around understanding consumer preferences and determining price points. When the conversation progressed towards availability of product and distribution, he decided it was time to take his business to the next stage.

Here are five aspects Mr. McClelland kept in mind, while scaling TurmeriX:

  • Focusing on numbers and data
  • Setting minimum order requirements
  • Investing in good talent
  • Training people to reach maximum potential
  • Leveraging online marketing to increase visibility

Our Fast ‘n Furious Innovation Programme adopts a similar approach. Developed to enable design-led innovation thinking, the short course helps businesses learn how to identify real consumer problems and implement solutions and verified measures that will take their businesses to the next level.

Through the process of strategy, hypothesis, understanding the consumer, building a product, gaining feedback and learning from these insights, we take businesses through a ‘LIVE’ innovation challenge to accelerate commercialisation and embed learning for future opportunities.

If your business is looking to scale up and explore new markets, please reach out to us here.

To know more about Errol McClelland and the TurmeriX story, please visit here.

 

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Innovate or Die

Sounds a bit drastic but a lack of real innovation is killing off traditional brands.

Many companies in the Consumer Packaged Goods (CPG) sector, amongst others, are actively shifting their innovation investment to working with external start-ups because their core business struggles to adapt their brand and marketing strategies to include breakthrough innovation.

In a recent interview with Inside FMCG, Gerrardo Mazzeo, Global Innovation Director at Nestlé, talks about the company’s open innovation initiative to work with start-ups to drive innovation growth. He shares his thoughts on the need to leverage external innovators who offer agility, speed, rapid prototyping and can accelerate the pace at which they explore customer trends, foster collaboration between stakeholders and engage in thought leadership, amongst other things.

Many of the big players in the CPG sector are following in Nestlé’s footsteps, by developing start-up accelerators and external partnerships, but I’m left wondering if that addresses the underlying issue.

‘If you don’t cannibalise yourself – someone else soon will’ one of the more famous quotes by Steve Jobs at Apple, highlights the underlying issue many large businesses face.

A recent article in Forbes magazine highlighted research conducted by IRI Market Advantage showed that since 2013, more than 17 billion in U.S. Consumer Packaged Goods sales have shifted from large players to smaller ones.

With the e-commerce boom, particularly in the food sector, brands who were previously fighting for shelf space with the ‘big boys’, have now found their loyal customer base online.

These brands often have a ‘more authentic story’ or a ‘healthier, fresher and more environmentally conscious offering’. They resonate well with the more aware new-age consumer and are managing to steal significant market share away from the established players.

Feeling slightly threatened by this shift in consumer behaviour Unilever, Campbell Soup, Nestlé and others, have been out on a shopping spree. In 2017, mergers and acquisitions between these big brands and the smaller boutique start-ups jumped to 45%, the highest in 15 years.

Apparently, the world’s biggest consumer goods companies are hungry for growth, but would prefer to buy innovative smaller companies rather than invest internally in changing the culture needed to grow organically.

Is it all just too difficult? Does size hinder growth and development? Is it a cop out for large businesses to outsource a key growth driver, particularly with a poor track record of acquisition success? Why is it that small and medium sized enterprises, with considerably less resources than the market leaders, are so capable of disrupting the market?

How willing is your business to follow the lead of Apple who cannibalised its iPod business virtually 100% over 12 years with the introduction of iPhone?

To know more about Gerrardo Mazzeo’s thoughts on the future of food, visit here.

To read about the rise of small CPG brands in the U.S. market, please visit here.

To know more about how we can help your business adopt an innovation-driven growth strategy, please reach out to us at enquiries@xpotentialanz.com