Pivoting Your Business and Inflection Points
A pivot happens when a firm makes a fundamental change to its business. Firms usually do so after determining that a product isn’t meeting the needs of its intended market. The Lean Startup by Eric Ries has the best definition. It says a pivot is “A structured course correction designed to test a new fundamental hypothesis about the product, strategy, and engine of growth.” In the early stages, companies are still getting to know the needs of their target market. It is then that pivots are more likely to occur.
Panera pivoted its business model during the Coronavirus to grocery delivery. It is a powerful example of the use of a plateauing business model. Panera was able to create new profitable service lines amidst challenging business conditions. It may be a sustainable new service line that can thrive in good and bad economic times. To make it seamless, Panera leveraged its enviable network of drivers. It also used its massive supply chain.
Another company that has pivoted its business to meet the needs of the current times is L’Oreal. The company never made hand sanitizer before. It is now producing 550 gallons of the stuff per week at its plant in Little Rock, AR. L’Oreal is showing its commitment to the state of Arkansas. The company is giving sanitizer to the healthcare system free of charge. It has also launched several other initiatives to support outbreak and recovery efforts.
The Importance of Pivoting
Large or small, pivoting is vital for every business for many reasons:
- The rapid changes in the current environment are affecting businesses. Apps such as Instagram and Twitter were flying under the radar a few years ago, and now they’re industry icons. Keeping in step with the changing world is critical to the success of a business. It means keeping an eye on changes in the industry and pivoting when necessary.
- Pivoting can create opportunities to expand revenue. It is a great way to build on the foundation a company already has. It also allows firms to grow revenue and bring more profits to the organization.
- It’s easier to stay relevant. Companies sometimes come to realize that the product or service they pivoted to is a winner. They may also see that their core product is no longer in demand. Pivoting allows a company to see results and to make conclusions about what works and what doesn’t. Make strategic use of pivoting as a way to avoid irrelevance.
How to Have an Inflection Point for Your Business
The inflection point is a proper business term. It is a turning point in a company, economy, sector, or geopolitical situation. When a company reaches that point, the market can expect dramatic change. Such changes can have either positive or negative results. In mathematics, the inflection point is where the curve changes direction. The financial crisis of 2008 was an inflection point. With the coronavirus pandemic, we are in the midst of another.
Every business will reach inflection points, where change is inevitable. There is no wrong time to innovate. But there are several critical points in the growth of your organization. They demand innovative thinking. So how can you have inflection points for your business? You can expand into a new market. Or you can launch a new product. Responding to changes in your industry can be an inflection point. So can seeking investment capital, or new competitors entering your market.
Blue Ocean Strategy
Most firms function under strong competition and will do anything to get market share. Companies using the Blue Ocean Strategy have very little or no competition. This strategy aims to make competition immaterial by presenting a product with superior features. An example is the invention of the Blackberry smartphone. The company can set higher prices than if it were in a competitive market. Thus, the Blue Ocean Strategy sets the stage for massive profits.
Using Non-Customer Research to Innovate to Get More Customers
It should be routine for all companies to gauge the satisfaction of their clientele. Companies can do so through customer surveys. It is as essential and helpful to survey non-customers since such a review can help the company to discover weaknesses in its marketing or distribution system. Either scenario can lead to low brand awareness. It helps the company decide what business and marketing strategies to use. Non-customer research can turn these non-customers and their friends into loyal consumers.
Using Market Research and Consumer Insights to Identify Unmet Customer Needs
Most businesses aim for differentiation in the market. Yet, it is worth noting that the best opportunities lie within customers’ unmet needs. No customer will buy a product or service unless they think they need it. To stand out, companies have to find ways to meet customers’ unmet needs. Market Research and Customer Insights can help firms to identify these needs.
Pivoting and finding inflection points call for a willingness to accept change. Every entrepreneur knows that adapting is a crucial trait of most of the startups that survive. Yet, they also know that pivoting can be difficult. So can adapting in the face of an inflection point. By focusing on the ideas above, you’ll be more likely to make the needed changes. It will also enable you to follow them through to greater success.