Successful growth is not only a function of strategic clarity and leadership but also a function of choosing the right markets in which to compete. This choice of markets is not always obvious. Growth goals and market dynamics may require expansion into adjacent markets, and there are many different dimensions of adjacencies to consider including:
- Products and/or services;
- Backward or forward integration.
Once you have a strategic baseline established (as outlined in Art of Strategy: Our Approach), adjacent market opportunities need to be considered along all of these different dimensions and evaluated based on:
- Competency and activity fit;
- Size, growth and margin potential;
- Competitive intensity and market concentration;
- Ease of entry;
- Key success factors; and,
- Execution success.
Avalon has successfully guided clients across many different industries and types of businesses to successful growth, each of which possessed different objectives, competencies and financial options. Although the foundation of the analysis is similar, this is not a “one size fits all” exercise. Subtle differences in a company’s strategic baseline and external market environment may suggest very different growth postures for seemingly similar companies. Our experience across many industries often helps us see opportunities and options in adjacent markets that others with only a single industry perspective cannot, and we leverage this to our client’s advantage.