The business world is full of opportunities, but it can also be full of challenges. One of the most frustrating experiences for any entrepreneur is when their business fails to grow, despite having an excellent product. This can be due to a number of factors, both internal and external, that are holding back progress.
If you are an entrepreneur and your business is not growing as you had hoped, you are not alone. Many businesses struggle to reach their full potential, even when they have a quality product that is in demand.
This can be a disheartening experience, but understanding the root cause of the problem is the first step toward finding a solution. In this article, we will take an evidence-based approach to uncover the hidden causes of stagnant business performance and provide practical strategies for overcoming these barriers and driving growth.
One of the primary causes of stagnant business performance is a lack of focus on market demand. Even the best products can fail if they do not meet the needs of the target market. Entrepreneurs often make the mistake of focusing too much on their own vision for the product, without considering what customers actually want.
One example of a business that made this mistake is BlackBerry. In the early 2000s, BlackBerry dominated the smartphone market with its signature physical keyboard and focus on security. However, as the market shifted towards touch screens and consumer-focused features, BlackBerry continued to prioritise its original vision for the product, leading to a decline in popularity and market share. Despite introducing touchscreen devices later on, they failed to catch up with competitors like Apple and Android, who had already captured the attention of customers with their user-friendly interfaces and popular app stores.
Blackberry failed, strategy lesson to be learned.
Fisker Automotive, the company founded in 2007 with the aim of producing high-end, environmentally friendly luxury electric cars, had to also suffer from the lack of focus on market demand. Despite receiving significant investment and press attention, the company struggled to gain traction in the highly competitive automotive market.
Fisker broke down on the road to electric cars
One of the main reasons for their stagnant business performance was a lack of focus on market demand. Fisker focused too heavily on creating a premium electric car, without taking into account the practical needs and budget constraints of their target market. As a result, their cars were seen as too expensive and not practical enough for everyday use, leading to slow sales and eventually, the bankruptcy of the company in 2013.
Another common cause of stagnant business performance is poor brand positioning.
A strong brand is essential for creating awareness and building customer loyalty, but many entrepreneurs overlook the importance of this aspect of their business. Poor branding can result in a lack of differentiation from competitors, making it difficult for customers to understand why they should choose your product over others.
The first example is the luxury car brand, Peugeot. Despite having a rich history and reputation for producing high-quality vehicles, Peugeot struggled to keep up with the changing demands of the luxury car market. Their branding was seen as outdated and unappealing to younger, more tech-savvy consumers, leading to stagnant sales and a decline in market share.
French brands Renault, Peugeot, continue their decline in Australia
Peugeot's branding was seen as outdated and unappealing to younger, more tech-savvy consumers for a few reasons:
Lack of Innovation: Peugeot was slow to adopt new technologies and design trends, making their cars appear outdated and less attractive to tech-savvy consumers.
Lack of differentiation: Peugeot's branding and marketing strategies failed to differentiate their cars from competitors, making them seem generic and unremarkable.
Outdated image: Peugeot's image and reputation were tied to an older generation of car buyers, making it difficult for them to appeal to younger, more tech-savvy consumers.
Poor marketing: Peugeot's marketing strategies were seen as uninspired and lacked the creative and innovative touch that appeals to younger consumers.
As a result of these factors, Peugeot's sales stagnated and their market share declined, leading to a need for a rebranding effort to better align with the changing demands of the market.
Another example is the British clothing retailer, Marks & Spencer (M&S). Despite having a strong reputation for quality and reliability, M&S failed to keep up with changing consumer preferences and trends. Their branding and marketing strategies were seen as outdated and unappealing, particularly compared to more fashionable and trendy competitors. This led to declining sales and a loss of market share, resulting in a stagnant business performance
Marks & Spencer failed business transformation
Mark & Spencer's branding and marketing strategies were seen as outdated and unappealing for several reasons. Some of the factors that contributed to this perception include:
Lack of innovation: The company failed to keep up with the latest fashion trends and lacked a clear brand identity.
Poor customer experience: The company's physical stores were often seen as cluttered and uninviting, with a confusing layout and limited product offerings.
Outdated advertising: Mark & Spencer's advertising campaigns were criticized for being unappealing and lacking in creativity, failing to resonate with younger, more fashion-conscious customers.
Competition from fast-fashion retailers: Mark & Spencer faced intense competition from fast-fashion retailers like Zara and H&M, which offered trendy, affordable clothing in a more modern and stylish retail environment.
Overall, Mark & Spencer's branding and marketing strategies were seen as outdated and unappealing, particularly compared to its more fashionable and trendy competitors, which had a more modern and appealing image.
What is an evidence-based approach in business?
An evidence-based approach in business refers to a systematic and data-driven method of decision-making that uses the best available evidence to inform business strategies, policies, and practices. This approach involves collecting, analysing, and synthesising data from various sources to make informed decisions that drive business outcomes.
The purpose of an evidence-based approach in business is to ensure that decisions are based on reliable and accurate information, rather than intuition, assumptions, or opinions. It helps organisations to make informed decisions that lead to better results and improved performance.
An evidence-based approach can be applied in various areas of business, such as marketing, human resources, and product development. For example, in marketing, an evidence-based approach may involve using data and research to inform marketing strategies and evaluate the effectiveness of marketing campaigns.
How an evidence-based approach can help business combat the causes of stagnant business performance?
An evidence-based approach can help businesses combat the causes of stagnant performance by providing a systematic and data-driven approach to decision-making. By using an evidence-based approach, businesses can:
Identify root causes: By collecting and analysing data, businesses can identify the root causes of stagnant performance, such as market changes, competition, or internal operational issues.
Make informed decisions: By relying on evidence and data, businesses can make informed decisions that are based on the best available information, rather than intuition or assumptions.
Prioritise actions: Based on the data and research, businesses can prioritise actions that are most likely to improve performance, rather than taking a trial-and-error approach.
Monitor progress: An evidence-based approach allows businesses to track progress and adjust strategies as needed, based on the results of the data analysis.
Improve outcomes: By making decisions based on evidence and data, businesses can improve their outcomes and performance.
By using an evidence-based approach, businesses can identify and address the root causes of stagnant performance and make informed decisions that drive positive outcomes. This helps to increase efficiency, reduce risk, and ultimately improve business performance.
What are the best practical strategies for overcoming these barriers and driving growth using the evidence-based method?
There are several practical strategies for overcoming barriers to growth and driving growth using an evidence-based approach:
Data collection and analysis Gather data from multiple sources, such as market research, customer feedback, and financial performance, to gain a comprehensive understanding of your business. Analyse the data to identify trends and patterns that can inform decision-making.
Evidence-based decision making Use data and research to inform decision-making and prioritise actions that have the greatest potential for driving growth. This may include testing and iterating on new ideas and strategies, based on the results of data analysis.
Continuous monitoring and improvement Continuously monitor your business performance and use data to inform decisions that drive growth. Regularly evaluate and adjust strategies, based on the results of data analysis.
Collaboration and cross-functional teams Encourage collaboration across departments and engage cross-functional teams in data analysis and decision-making. This can help to ensure that decisions are based on a comprehensive understanding of your business and the broader market. Invest in technology and tools Invest in technology and tools, such as data analysis software and customer relationship management systems, to support data collection and analysis. This can help to streamline the process and make it easier to gain insights from the data.
By using an evidence-based approach and implementing these strategies, businesses can overcome barriers to growth, make informed decisions, and drive positive outcomes. The key is to continuously collect and analyse data, use the evidence to inform decision-making, and regularly evaluate and adjust strategies, based on the results of the data analysis.