Summary: How to Grow When Markets Don't

Review and Analysis of Slywotzky and Wise's Book

BusinessNews Publishing

• Publisher: Must Read Summaries
• Year: 2016
• eBook ISBN: 9782806246844
• Topic: Business
• Subtopic: Marketing
• Index: Business

The must-read summary of Adrian Slywotzky's and Richard Wise's book: `How To Grow When Markets Don't`.

This complete summary of the ideas from `How to Grow When Markets Don't` shows that for many years, the answer for growth creation was thought to be product innovation – a better product. However, as every company creates more and more products, ever faster, this is proving more difficult. Customers are not willing to buy another product just because it is slightly better. This summary suggests a more effective strategy: “demand innovation” – identifying and serving the customer needs which arise naturally out of the sale of existing products and services. It’s very possible that your company will have hidden assets that, if used properly, can generate value. Examples of this include access to and knowledge of your customer base, and technical expertise in your industry. This summary takes the reader through a five-step process to harness demand innovation. The authors encourage companies to look at customer interaction at the beginning of the process, not the end; they suggest being aware not only of assets but of liabilities holding you back, such as a mismatch in skill-sets or distributors having veto power over development. 

Added-value of this book: 
• Save time 
• Understand key concepts 
• Increase your business knowledge 

To learn more, read `How to Grow When Markets Don’t` and discover a compelling blueprint for long-term strategy and short term, applicable changes. 

Summary of How To Grow When Markets Don’t (Adrian Slywotzky & Richard Wise)

1. Identify opportunities to address next-generation customer needs

Instead of considering the sale of your product or service the culmination of your business relationship with your customer, look at it as the beginning. Find out how your customers use your product, maintain it, finance it, store it or dispose of it, and embed yourself somewhere within those economic activities to capture more value. Look for more advanced customer needs and serve those.

For most offerings, there are a range of economic activities which surround the use of your product or service. These activities are usually far greater in value than the cost of the actual product or service itself, often ten-to twenty-times greater. In each of these surrounding economic activities, there are many hassles and inefficiencies for your customer. By understanding and finding tangible ways to participate in this extended value chain, you can create significant commercial opportunities for yourself.

Conceptually, customer demands can be grouped into three broad categories or “orders”:

3rd order needs

Solve economic issues

• Provide assistance with installation, maintenance, financing and training.
• Help improve the customer’s cost structure and remove process inefficiencies by reducing waste and lowering capital costs.
• Help customers reduce complexity, make better decisions and speed their own offerings to market by providing support and decision systems.
• Help customers reduce risk and volatility by assuming responsibility for quality control and cycletime.
• Assist customers to grow their top-line revenues by offering add-ons and integrated offers of products and services.

2nd order needs

Improving activity economics

• Improve operating efficiency by streamlining purchase and support systems and processes.
• Have high cost predictability.
• Help manage the product lifecycle and provide timely upgrades.

1st order needs

Product/service functionality

• Product/service features

The essence of demand innovation is to look for commercial opportunities meeting 3rd order needs for your customers. This will generate growth in three distinct ways:

1. You will create new opportunities to sell more of your core product or service – because you will be reinforcing and deepening the customer relationship. The customer focus will move from pricing alone to other dimensions of the relationship.
2. You’ll be able to come up with integrated offerings – and thereby generate new sales from adjacent markets never before accessed.
3. You’ll have the opportunity to turn improvements in the customer’s value chain into new revenue streams – through outsourcing fees, tolling charges, output guarantees, subscription fees and so forth.

Some examples of companies which have identified and then met the 3rd order needs of their customers include:

• Cardinal Health
  With a background in pharmaceutical distribution, Cardinal launched a series of new businesses which were designed to help its customers improve their economics. For example, Cardinal made available to its 26,000 retail pharmacies information systems which contained Cardinal’s know-how on inventory management and procurement. Cardinal also provided these pharmacies with a range of management services. For hospital groups and managed care providers, Cardinal developed an automated system for dispensing medication to patients automatically, improving accuracy. Cardinal also began offering drug makers complete logistical systems, outsourcing services, contract manufacturing and other specialist services. In this way, Cardinal expanded its economic neighborhood and generated double-digit growth in revenues and operating profits. Over the past five years, Cardinal has generated more than $25 billion in additional market value by meeting 3rd order customer needs.
• John Deere
  A long established tractor and mower manufacturer John Deere has started to offer lawn-care professionals and landscapers an array of services aimed at their higher order...

Table of contents

• Title page
• Book Presentation
• Summary of How To Grow When Markets Don’t (Adrian Slywotzky & Richard Wise)
• About the Summary Publisher
• Copyright