The manufacturing sector is a vital part of the UK economy, accounting for £183bn of output, over 10% of GDP and employing nearly 3m people. However, the sector has been facing a plethora of challenges in recent times including, increased competition from low-cost countries, supply chain disruption, rising production costs, skill shortages and technological advancements. Competition is fierce, making it more crucial than ever for manufacturers to adopt effective growth strategies.
This article aims to provide a guide to effective strategies for accelerating manufacturing growth in the sector, including market research, product innovation, and effective marketing.
What are the key facets of a good strategic growth plan?
A good strategic business growth plan should include a clear understanding of the business’s current situation, goals, and market trends. It should identify opportunities for growth and outline specific actions to achieve those goals. Key facets of a successful plan include market research, financial forecasting, risk management, resource allocation, and performance tracking. A solid growth plan should also prioritize innovation, adaptability, and customer satisfaction. By focusing on these areas, businesses can develop a sustainable growth strategy that ensures long-term success.
Do Your Market Research
Market research is the foundation of any successful growth strategy, a high-quality research programme will provide invaluable intelligence and insight. By conducting thorough research, manufacturers can identify opportunities and challenges in the market, understand customer needs, and stay ahead of the competition.
To conduct effective market research, manufacturers should:
- Identify target markets and segments. Times of change like we are currently experiencing are a good time to lift your head above the parapet. Check the markets you are in are still as relevant, and where there are emerging markets that are a good fit for you.
- Analyse industry trends and market conditions. There are many digital platforms and papers full of intelligence at your fingertips. Are you embracing these and analysing the trends that could or are affecting your future?
- Understand customer preferences and behaviours. Your customers will be setting their future direction, making changes, and setting new objectives. Are you aware of your customers future plans, and how they may affect you or the opportunities these may present you with.
- Monitor competitors and their strategies. Hopefully, you know who you are competing with, but asking customers who they are being approached by is good practice. Are there are any new entrants? Also, a quick google search and a check of your competitors’ websites can provide a lot of good data.
- Evaluate potential risks and opportunities. Are you spending your monthly management meetings firefighting, or are you looking ahead, and evaluating the risks and opportunities with your team? A great opportunity to engage your team and gather intelligence every month.
In a world where the pace of change, innovation, and technological advancement is relentless, perhaps the ability to learn faster than your competitors is the only sustainable competitive advantage.
Define Your Competitive Advantage to Accelerate Growth
In today’s competitive marketplace, it is more important than ever for businesses to have a clear understanding of their competitive advantage. A competitive advantage is something that gives a business an edge over its competitors, and it can be anything from a unique product or service to a strong brand or reputation.
There are several key steps that businesses can take to define their competitive advantage. These steps include:
- Identify your target market. The first step in defining your competitive advantage is to identify your target market. Who are your ideal customers? What are their needs and challenges? Once you understand your target market, you can begin to develop or align a product or service that meets their needs or makes their lives easier.
- Analyse your competition. Once you know who your target market is, you need to analyse your competition. What are your competitors doing well? What are they doing poorly? By understanding your competition, you can identify areas where you can differentiate yourself.
- Identify your unique selling proposition (USP). Your USP is what makes you different from your competitors. It is the reason why customers should choose you over your competitors. Your USP can be based on your product or service, your brand, your customer service, or any other factor that sets you apart from the competition.
- Communicate your competitive advantage. Once you have defined your competitive advantage, you need to communicate it to your target market. This can be done through advertising, marketing, public relations, and other forms of communication.
By following these steps, businesses can define their competitive advantage and accelerate their growth.
Here are some additional tips for defining your competitive advantage:
- Speak to your customers. Talk to your best customers and ask them why they do business with you. What is it that they feel you do that is unique. What do they feel you could be better at.
- Be honest with yourself. It is important to be honest with yourself about your strengths and weaknesses. If you are not honest, you will not be able to develop a competitive advantage that is truly sustainable.
- Be creative. Don’t be afraid to think outside the box when it comes to defining your competitive advantage. The best competitive advantages are often the ones that are unexpected.
- Be persistent. It takes time and effort to develop a competitive advantage. Don’t give up if you don’t see results immediately. Keep working at it, and eventually you will succeed.
Product and Service Innovation
Innovation is critical to staying competitive and meeting changing customer demands. Manufacturers should continuously invest in research and development to create new and improved products that meet the needs of customers or better still, make their lives easier.
To foster innovation, manufacturers should:
- Encourage creativity and experimentation. Too many manufacturing businesses have an unhealthy relationship with failure. Businesses that are innovative and continuously improving encourage people to try new things and celebrate the effort. As we all know, the best ideas are the ones that begin with, “I know this may sound silly but…”
- Invest in research and development. Does your business model factor in research and development time and cost. During tough times, this can sometimes go out of the window, but businesses that excel see this as vital to the longevity of the business plan. How much time is being spent in your business this week on innovation?
- Collaborate with customers and suppliers. You don’t have to do this alone. Speak to your customers about their needs and explore different ways of servicing them. Similarly with supplier, explore how they could service your needs in new and innovative ways. Do you have these kinds of discussions, or is it all day-to-day stuff?
- Monitor industry trends and emerging technologies. What innovations are happening in your sector, or similar sectors? Could you become more unique to your customers if you embraced any existing or emerging technologies?
- Continuously evaluate and improve products. We’ve always done it this way, is one of the statements made by businesses coming to their end. In this world of fast innovation and change, are you spending enough time evaluation your products and services and how satisfied your customers are with them?
Work with Your Supply Chain
In the past, it was thought that companies competed for market share growth. However, in recent years, it has become clear that supply chains are also playing an increasingly important role in competing for growth. There are several reasons for this.
- Supply chains are becoming increasingly complex and globalized. This means that it is more difficult for companies to control their own supply chains, and they are more reliant on the performance of their suppliers and partners.
- Customers are becoming more demanding. They are looking for products that are high quality, affordable, and available when they need them. This means that companies need to have a well-functioning supply chain to meet customer demand.
- Technology is changing the way that companies operate. New technologies, such as cloud computing and big data, are making it possible for companies to manage their supply chains more effectively and efficiently. This is giving companies a competitive advantage over those that are not using these technologies.
As a result of these factors, supply chains are playing an increasingly important role in competing for business. Companies that have a well-functioning supply chain are more likely to succeed in the market than those that do not.
Here are some examples of how companies can collaborate with their supply chains to compete together for market share growth:
- Work with your supply chain to reduce costs. This can be done by negotiating or collaborating to reduce waste and cost, finding more efficient ways to transport goods, and reducing inventory levels.
- Work with your supply chain to improve customer service. This can be done by ensuring that products are available when customers need them, by providing accurate information about product availability, or by offering fast and reliable delivery.
- Work with your supply chain to differentiate your products or services from those of your competitors. This can be done by using a unique supplier network, by developing new ways to transport goods, or by offering innovative customer service solutions.
By investing in its supply chain, a company can gain a competitive advantage over its rivals and grow its market share.
Find the Best Marketing Channels
Effective marketing is simple. It is about getting your message in front of your audience. Good marketing is essential to reaching and engaging existing and new customers and build brand awareness. Manufacturers should develop effective marketing strategies that communicate their value proposition and differentiate them from competitors.
To develop effective marketing strategies, manufacturers should:
- Define their target audience and segments. As mentioned earlier in this article, who are your ideal customers, and what value can you provide for them?
- Develop a clear value proposition and messaging. Utilising the language your customers have shared with you, what is the value that you provide?
- Utilise various marketing channels, such as social media, email, and events. Where are the customers who buy your products and services looking? And what is the chain of events that leads to a purchase? Quite often, a buying decision is not made by one person, and different people in the chain have different needs. Some people’s needs are more weighted than others too. Make sure your efforts are in the places that will provide the best bang for your buck.
- Monitor and measure marketing performance. Contrary to a lot of beliefs, marketing can be made measurable. For most manufacturers, the most important output from a good marketing campaign is new leads. Are you measuring this, and checking what you are spending to create the leads?
- Continuously evaluate and improve marketing strategies. Like everything else, marketing is constantly changing and tools and techniques from a few years ago, may not be the best for your business. Speak to other manufacturers about marketing strategies they are utilising to get their message in front of their audience.
Accelerating manufacturing growth in the industry requires adopting effective strategies that align with customer needs and market conditions. By conducting thorough market research, fostering innovation, and developing effective marketing strategies, manufacturers can achieve sustainable growth and stay ahead of the competition.
This post was written by Simon Carin, an accomplished facilitator and mentor with the Manufacturers’ Alliance. During Simon’s 20 years as an MD, the businesses, and people he led consistently delivered profitable growth ahead of the market. Top line growth that enhanced bottom line and ROI. If you would like Simon to support you in developing a robust growth strategy for your manufacturing business, you can request his one-on-one support via our coaching and mentoring offer here.
Another Article You May be Interested in: The Case for Acquisitive Growth
Many business owners do not fully consider and evaluate the opportunity to accelerate growth through acquisition. Acquiring a business comes with its own set of challenges however, it can be a highly effective way to accelerate growth, acquire new skills and competencies and if well managed, can be a surprisingly cost-effective way to accelerate growth.