Change is eternal, growth is continuous

In the 1980s, almost everyone agreed that the soft drink market in the US was fairly mature. In the face of the powerful offensive of competitors such as Pepsi, Coca-Cola seems to have only parry but no power to fight back. This can not help but make people worry about the future of Coca-Cola, and some securities analysts even sing an elegy for Coca-Cola. Roberto Guo Sida, who was in charge of Coca-Cola at the time, asked the company's senior general managers two questions casually: What is the average amount of liquid beverages consumed by each of the world's 4.4 billion people every day? The answer is: 6? oz. So how much Coca-Cola does each person consume every day? People answer: Less than 2 ounces. Coca-Cola's tomorrow will suddenly open up. The enemy of Coca-Cola is not Pepsi, but coffee, milk, and tea. Their enemy is water. Roberto Gosta's concept of "getting a share from the belly" has also become a classic example of the idea of expanding the pond, explained by the two authors of this book, Ram Charan and Noh Tiche.

There is no sunset industry, only sunset thinking, and every enterprise can continue to grow. No matter what industry your company is in, you can grow as long as company leaders learn to look beyond traditional definitions of the industry and the market. Continued room for growth comes from expanding the pond you fish in, or finding a unique location within an existing pond that has growth potential.

1. Expand your pond

There is no such thing as a mature industry, every industry has room for growth. As long as you execute an outside-in strategy, expand your pond, and implement your growth philosophy from top to bottom, complemented by strong, effective execution at the end, whether it's Coca-Cola, Compaq, DuPont, GE, or your business can continue to grow! The outside-in strategy means that starting from the market demand, through in-depth understanding of customers' ideas, we can foresee the changing needs of customers, and understand the essence of those needs, so as to reflect on ourselves and re-examine our own enterprises in a targeted manner. Adopt a targeted strategy and execute it effectively.

The goal of expanding the pond is to re-measure your current market share against the appropriate potential market. The more accurate, timely, objective, and direct you understand customer needs, the more secure your future will be. Leaders of successful growth companies are open-minded in order to look at themselves from the outside in. We must also pay attention to the pitfalls. Some leaders define a pond, then expand it into a lake, and then they see a wider sea, but a small boat that is not yet capable of sailing will capsize in the unpredictable sea. Therefore, leaders must have self-control and know how far they should go and how fast they should run. Blind diversification and expansion is dangerous.

2. Continued growth in existing ponds

If you judge the market in terms of total demand, you may be looking at a "mature" industry. But any market is the sum of many segments, each of which fulfills a specific need. You can re-segment the market through value propositions, by examining consumer motivation and purchasing patterns, through price discounts, through technological advancement, through product line extension, through the construction of commodity distribution channels, and similar methods.

A great secret to growing in a mature industry is that any market has segments with growth potential, but only if you know how to identify them. Intuition, imagination and creativity of leaders are important when identifying new market opportunities, but so are rigorous analytical methods. You can use this 2 × 2 chart to find the position you can strive for, horizontal axis: customers - existing customers and new customers; vertical axis: existing needs and new needs. If every company can measure its core competencies from the outside in, then they can discover the channels to meet the new needs of customers, and even the way to confirm the new needs.

3. Not all growth is good growth

In 1993, Dell's annual sales revenue went from less than $550 million to $2 billion in just two years, but the company's stock price went from $49 plummeted to $16, and what Dell learned from it was to "steer the company out of a growth, growth, or growth orientation and steer the company toward growth that focuses on discounting assets and profitability." Not all growth is is excellent growth. Excellent growth is sustainable and lucrative, and at the same time, the use of capital is efficient. Growth at all costs, or growth only for growth's sake, can have disastrous consequences.

There is no such thing as a completely static market where you can sit back and relax. There are always competitors coming in to break and change the rules. Therefore, "offense is the best defense". The best weapon against competitors is continuous growth. Aggressive revenue growth goals must be achieved through relentless efforts to control costs and improve productivity, rebuild the business as needed by operations, and wisely reinvest.

Frankly, there is no formula that can guarantee that the splendid business models we discuss today will continue to grow tomorrow, just as no market is eternal and no strategy can guarantee that it will not become obsolete or ineffective. No strategy can succeed without excellent execution. The ultimate secret of sustainable growth is the secret of life itself - change is eternal, and in the face of the ever-changing external environment, we must constantly adjust and adapt.

Keeny Chen, Associate Editor, CEConline Website