Investing in and leveraging from existing core capabilities helps to maximize return on investment and increase chances for success during the launch of new product lines or distribution channels. Identifying the true core capabilities of businesses provides a firm foundation for current and future growth and helps to guide strategic decisions about direction and investment.
Situation and Complication
A middle market consumer products company was faced with eroding market share and an aging customer base. The core product line was threatened by technology innovation and the long-term viability of the company was in question. While the traditional product offerings and communication methods were still relevant to their current customers, new customers wanted digital marketing and digital delivery, things that were largely out of reach due to contractual constraints. Faced with this existential threat, the company needed to find a new business model for long term viability.
Approach
A Navigare Principal assembled a diverse team from inside the company and led a strategic development effort to identify options for future growth. The development team focused first on identifying the true core competencies of the business, the strategic differentiators that led their customer to purchase from them over competitors and would be hard for competitors to replicate. Through a series of directed exercises, the team identified the fundamental competencies of the business. By the end of that stage in the process, what the company had initially thought where the core competencies had been replaced by a different, much better and more actionable assessment. The team was then led through a sourcing and vetting process to build strategic options from the competencies. Blue sky sessions evolved into critical discussions about market potential and execution options.
A major new adjacent revenue opportunity was birthed from the process and a team assembled to build and implement a test plan. Strategic partnerships were formed to quickly fill gaps in key areas where the company lacked experience or available resources. An implementation plan was developed to stress test critical assumptions to get to a go/no go decision quickly.
Outcome
The project was a terrific success. The new business line launched successfully less than 1 year from the initial strategy sessions and with the confidence of a positive market test. 3 years later, the new business line was a major source of revenue and profits for the once threatened organization and prospects for growth were tremendous. Within 5 years, the new business achieved top 3 in the industry with momentum to gain the top slot in the near future.
