The past few years have been a wild ride. We’ve navigated COVID-19, faced bushfires and drought, seen economic change due to power station closures, uncertainty about the future of mining, the investment into defence, plus global market and tech trends. Given this, if there was ever a time for diversification, it’s now.
This need to follow new (and more sustainable paths) is already widely felt, with the Hunter Joint Organisation currently working to establish the Hunter 2050 Foundation. Its aim? To foster diversity and growth.
Some people think we’re not quite ready for this kind of big change. But, the reality is, in just five years, our local industry will likely look fantastically different.
In fact, transformation is already happening. The shifting focus from coal to limited Greenfield sites; the PM coming to the Hunter to release the Hydrogen Roadmap; the Energy Renaissance Project; and the rise of hybrid and electric vehicles.
To stay ahead and survive, Hunter businesses need to acknowledge these changes and diversify to proactively ride the changing landscape. Many companies are already doing just that, and, perhaps surprising, marketing sits at its heart.
As Marketing and Business Consulting God, Peter Drucker once said,
“The business enterprise has two – and only two – basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.”
Without the marketing bit, how will you know what the market wants? How will your audiences see what you’re doing to change and innovate? And how will they know about the new things and alternative solutions you offer?
But what exactly does diversification mean? Essentially, it’s a growth strategy where you add products, services and markets to your core business.
You can opt for horizontal diversification (expand product range), vertical (become your own supplier or move closer to your customer) or lateral (expand into a new industry). Ansoff’s Product/Market Matrix is the go-to growth strategy tool.
To pinpoint how and when to diversify, you need to: engage in detailed market research, assess customer needs, have a clear product development strategy and market testing, plus sales, marketing and supply chain operations that can cope.
Diversification is a big commitment, so make sure you’re asking: Do we understand our market? Do we have the in-house expertise? Do we know how to sell effectively? Do we have the capacity? Can we afford it? And how will we curb risk?
If your answers are nudging no, you may be able to increase your market share through joint ventures or informal partnerships.
Also, consider what your company does better than any of your current competitors, what strategic assets you need to succeed in a new market, and whether you can catch up or leapfrog new competitors to emerge a winner. The key to diversification success and achieving sustainable advantage is the ability to create something unique, valuable and out there. For this, marketing delivers.
If you want a business partner who can work with you to discover nuggets of diversification gold to help you stay ahead as our region continues to change, outsourcing your marketing leadership could be a winning decision.
The Measured Marketer