One fundamental of successful strategic planning is the ability to craft growth strategies that capitalize on your organization’s capabilities. Over my years as a strategy consultant, I have found the Growth Strategy Matrix (below) to be an excellent means for exploring alternative growth avenues. This simple yet effective tool is used to define business opportunities, leverage strengths, and minimize risk over the long term. It helps focus resources on growth initiatives with a high probability of success, given the skills and capabilities of employees, and strengths of your business processes and assets.
The Matrix consists of four boxes which allow you to evaluate products and services in CURRENT PRODUCTS/ relation to the SERVICES capabilities of your infrastructure (your NEW people, business PRODUCTS/ processes, and SERVICES assets).
Growth Strategy Matrix
In the upper left, the “current” product/ infrastructure box represents your existing core businesses. In the lower left and upper right, you list “new” products/infrastructures. These are growth avenues to consider as extensions of your “core” capabilities.
First and foremost, don’t pursue complex growth initiatives unless you have secured a strong foundation within your core businesses. Companies that try to expand from a weak core rarely succeed. Be sure your core business can support growth initiatives.
Second, avoid pursuing initiatives that fit in the lower right hand box (New Product requiring New Infrastructure). Growth initiatives in this box are generally expensive and risky, with a low probability of success because the organization lacks experience and expertise.
Growth initiatives that should be considered include those in the upper right hand box (current products that can be leveraged into new infrastructure). As an example, a company might decide to pursue the expansion of its current retail food products into the foodservice channel. A joint venture with an existing foodservice operator might be considered a means of entering this market.
Growth might also be considered in the lower left hand box (current infrastructure that can be leveraged to bring new products and services to market). As an example, a company might leverage its manufacturing capabilities or existing sales and distribu- tion network to launch innovative new products to existing customers.
The number of growth initiatives you pursue will depend on the business opportunity, and impact on profitable growth. Quantifying each will help narrow your choices to the most promising growth initiative over the long term.
I have used this simple tool successfully with clients for over ten years, and in my own business. I would welcome any comments or questions you might have as you use the Growth Strategy Matrix to help you achieve profitable growth.