Eager heads of businesses plotting growth strategies often tackle new markets by applying the approaches that have worked time and again for established market segments.
After all, these are the methods that are taught widely in business schools, and they are analytically robust. The result is a blizzard of graphs, detailed benchmarks, and carefully drawn trend lines. It takes hard work to package these findings together. Alas, the product is often worthless. I know: in 1997, I used that type of analysis to tell an IT company that the Internet was too small to matter.
In Canada’s leading business publication, the Ivey Business Journal, I detail five ways in which strategy for new markets can be completely different from longstanding approaches to established markets. Frequently the right growth strategies for new markets are counter-intuitive, but they makes sense in the rapidly-shifting environment of emerging industries. Much as Newtonian physics breaks down at a nano-particle level, the dynamics of new markets follow a distinct rulebook. By using the right toolkit — still analytically rigorous, but distinct from the timeworn approaches — business leaders can vastly improve the odds of success with critical growth ventures.