Strategy & Innovation for Small Businesses

Authored by Hayden Davis King, Yue (Emily) Wang, and Charlie Susser

CIAG Strategy and Innovation for Small Businesses.pdf

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Introduction

 Innovation and strategy are two key elements of the growth of any small business. This article will discuss how to best use innovation to propel your business as well as entry and marketing strategy. Innovation can take the form of business model innovation as well as technological innovation. Both types are important, and their interaction has the potential to bring your business to new heights. A good entry strategy is crucial to getting your small business off to a strong start. Marketing strategy is what will keep your business competitive, profitable, and growing for years to come.

Innovation[1]

The key to successfully using innovation to grow your business is to take a systematic approach. This starts with creating clear goals and an innovation strategy. Innovation can make a product more valuable to customers, cheaper to produce, or improve the externalities of the product. While the process of generating value for the company based on an innovation may be straightforward, protecting this value is not always as straightforward. Patents can help in some cases, but it is important to realize that some or even most of the value that your innovations create may eventually be captured by competitors. To help ameliorate this, consider how technological innovations and your business model can work together. A great example of this is Apple’s ecosystem of products. Each new product or feature increases the marginal utility of Apple products to existing customers.

Innovation in your business model and technology can help grow your business on their own, but their interaction is also important. An innovation strategy that consists entirely of routine innovation that builds off of existing technology and your existing business model may also be sustainable in some cases. Consider the case of a fashion designer. Routinely making new designs is likely sufficient to keep their business profitable. In emerging industries, disruptive technology and novel business models are more important.

Entry Strategy[2]

When entering a market, it is important to set clear goals. These goals include revenue thresholds, reaching certain markets, expanding at a given rate, and more. The next step is to research your market. It is important to take note of:

Market Structure

○   How many firms are there?

○   What sizes are the firms?

○   How do the firms compete with each other?

○   What is the degree of international competition?

○   What is the cost structure of a firm in your industry?

○   Who are the buyers?

Your Value Proposition

○   What unfulfilled demand do you seek to meet?

○   How do you differentiate yourself from existing firms?

Regulations and Government Intervention

○    Which taxes and tariffs must you pay?

○  Which government bodies regulate your industry?

○    Which regulations must you comply with?

○    Are there any government programs that can help your business?

After forming a solid understanding of your market, you will need to choose how to enter. The optimal entry strategy depends on your business goals and industry. Options include:

●     A joint venture with an existing business

●     Opening a brick-and-mortar location

●     Starting with just e-commerce

●     Selling directly to an intermediary/exporter

●     Acquiring an existing business

Marketing Strategy

A marketing strategy dictates how your company will position itself in its market. It is about the product itself as well as how the product is promoted. Marketing strategies are typically divided into four parts:

●   Product

●   Price

●   Place

●    Promotion

Think first about what the unique appeal of your product is. What sets it apart from its competitors? Is it quality, cost, or something else? Think about who you intend to sell the product to. What other options do they have? How can you set a price that makes your product the most appealing option to your desired customers? Referring back to your market research, you need to define the size of your market. Think about where your potential customers are concentrated. Your target customers need to discover your business first, and some sources of information are more and less important to them. How can you create marketing materials that inform your desired customers about your product and why it is the best of the available alternatives? How will you target advertising to reach potential customers?

How CIAG Can Help

• At CIAG, we help small businesses enter the market strategically through comprehensive compliance assistance, market research, and media management.

• We also offer assistance in developing and executing effective product launch strategies.

• By partnering with CIAG, small businesses can leverage our services to better innovate and achieve sustainable growth.

Conclusion 

 It can be intimidating for small firms to navigate this highly competitive and complex industry. Getting success demands a very deliberate strategy. Small firms must create thoughtful entrance strategies in addition to well-thought-out marketing strategies. Comprehending the nuances of a new market a small firm is venturing into is important to its prosperity. Gaining as much knowledge as possible about the market gives entrepreneurs the tools and information they need to properly launch and grow their companies. This can be achieved by having a thorough understanding of the market structure, being aware of any applicable laws in the market being entered, and comprehending the importance and function of a hypothetical small firm.

For small businesses to stand out in crowded markets, their marketing plans are essential. To effectively reach the correct audience, this entails developing distinctive value propositions, comprehending customer needs, establishing competitive pricing, and creating focused promotional strategies.

CIAG provides tailored guidance for clients to enter new markets strategically. By providing them with specialized market research, thorough compliance support, and efficient media management. Our assistance includes creating and implementing effective strategies for the launch of new products, allowing companies to grow sustainably and innovate in the fast-paced market of today.

[1] Gary P. Pisano. (2015, June). You Need an Innovation Strategy. Harvard Business Review. https://hbr.org/2015/06/you-need-an-innovation-strategy

[2] BDC. “6 Steps to Create a Winning Market Entry Strategy.” BDC.ca, 12 Sept. 2020, www.bdc.ca/en/articles-tools/marketing-sales-export/export/winning-market-entry-strategy.