Businesses face a multitude of challenges:
The stresses of expanding, changing, and staying competitive, among many others, have brought headaches and financial troubles for entrepreneurs.
However, as there is a wealth of information available on how business leaders can solve their problems, what if you start using a different approach to those difficulties?
What if you shifted your mindset and began to see these problems as possibilities for innovation and growth?
In this article, you will learn different methods on how to find business challenges to focus innovation on.
Let’s get started.
What makes a good business challenge an opportunity?
Business is a risk. Terrible business deals lurk around the corner and can end up extremely expensive, especially if taken without thorough study.
Given how business owners are always on the quest for innovative ideas, it’s easy to have some proposals mistaken as the next big thing.
This is why it is important to have the skill, vision, and knowledge when identifying great business opportunities.
You need to know what you want, what questions you have to ask yourself, and what things you truly anticipate for the future.
Knowing these factors will help you create the goals you’d like to achieve — thereby helping you understand what opportunities you’d like to go for.
Still, regardless of its type, there are a few common things that make a business opportunity worthwhile:
1. The idea or proposal solves an existing problem.
One of the best indicators of a good business opportunity is when people have a genuine need for it.
If it solves an existing problem, there is a great chance of it being profitable and sought after, particularly if it performs better than what’s currently in the market.
2. You can offer it at the appropriate market price.
Establishing how much to charge for your goods involves more consideration than just evaluating your costs and putting a markup.
If you can provide the product or service at a price that’s consistent and acceptable with the market, then you can balance making a profit while enticing your clients to buy what you offer.
3. The opportunity is in line with your market.
When it comes to analyzing commercial opportunities, timing is crucial. Everything has to fall into place for the project to be a success.
Examine your target market and conduct proper studies to monitor what they want and need.
4. You have the resources necessary to sustain the business.
Resources do not refer to money alone…
Though funds are important, you also need to have what it takes to manage and sustain the business you plan to run. You have to master your product and service to create matching strategies.
If you come across an opportunity that appears to have all of these qualities, gather all the information that you need to decide whether you want to pursue it or not.
By the way, we published a free ebook where we shared how to use ideas for an efficient ideation process and how you can promote innovation culture in your company. Feel free to grab a copy today!
How to spot business challenges to focus on
Realizing and addressing business challenges is a must if you want your company to continue to thrive and prosper.
To tackle business difficulties, it is critical to be ready, recognize them immediately, and devise a strategy to overcome them.
Here’s how you can effectively spot business challenges to focus on:
1. Assess current business strategies
Being complacent puts your business at risk. Customers’ needs are evolving, and new trends are emerging every now and then.
Hence, it would be risky to assume that whatever worked for you in the past can also work for you in the present. This is the reason why you need to examine your existing strategies regularly.
Once you begin, you might want to take a look at the following areas:
- Optimizations in new processes. Are your processes automated for enhanced internal communication and boosted productivity?
- New products. Do your new products respond to customer pain points? If not, what areas can you improve on?
- New markets. Is your team up-to-date with market conditions? What business decisions have you recently made out of outdated information?
- Business models. As interindustry competition increases, what innovations can you make with your current business model? Should you switch to a new one?
Remember, you need to stay ahead of your competitors. Create an effective business plan, innovate continuously, and adapt over time.
2. Examine business units
Business units refer to organizational subunits that can function as separate businesses in a variety of ways.
This covers their capacity to design marketing plans, devise strategic concepts, and even build their own brand identity.
If you have business units within the company, check whether they are:
- Enabling you to adapt to shifting markets and demands while targeting numerous audiences at the same time
- Establishing realistic goals for their area of the parent business
- Bringing you the chance to correctly deploy financial and human resources
- Assisting you in determining initiatives that generate growth in specific markets
- Giving you a higher chance of survival in the long run
- Able to prevent competitive convergence
- Capable of developing their own core competencies for certain audiences and industries for increased profitability
A strategic unit business structure is not for everyone:
It requires tedious work, and it increases the possibility that the business will begin competing with its own products or services in some markets.
Any holes, gaps, and issues that occur within business units can raise the possibility of failure emerging inside the company.
As a result, the implementation of business units can become difficult and costly.
3. Talk to your customers
Customers are more likely to stay with a brand that reaches out and provides solutions.
When you know what difficulties customers encounter regularly, or what troubles they have when using your products and services, you can find ways to help them more effectively.
To do this, you must communicate with your customers, and you can accomplish this by:
- Setting client expectations
- Sending emails and feedback surveys
- Conducting innovation campaigns to gather challenges instead of ideas
- Creating an online presence to track customer complaints on social media
Retaining existing customers can be difficult…
A drop in the quality, increase in prices, and the inception of more lucrative competitors can keep them away. Find effective channels to keep customers happy and willing to pay continuously.
Customer spending habits are a continuously changing landscape, so you have to identify ways to keep them invested in your brand no matter what.
4. Perform a SWOT Analysis
One of the most often used strategic analysis tools is the SWOT analysis.
This method focuses on four major variables that impact your business:
- Strengths. The most powerful aspects of your business model and the most successful selling factors. Your team’s key abilities and your investments.
- Weaknesses. The weakest points in your business plan and sales funnel. What’s missing in your team and in your investments.
- Opportunities. Leads, partners, activities, and even new target industries.
- Threats. Potential rivals, grounds for investors funding cuts, or bad market developments.
A SWOT analysis will usually offer you useful information about your company. It can assist you in identifying fresh possibilities and prospects that you might potentially capitalize on.
Furthermore, when you discover your weaknesses and dangers, you will be able to spot issues and understand where changes can be made. This way, you can look at every element of your business objectively.
Identify any areas of competence in the firm that are weak and then take actions to strengthen that component.
5. Analyze your customer segments
The goal of analyzing customer segments is to examine how each of them is doing.
That way, you get to discover issues and recommend adjustments, boosting the profitability of the business even further.
Analyzing customer segments helps marketers reach out to customers in the most effective way possible. It enables accurate identification of customers based on several factors.
The benefits of customer segmentation include:
- The concentration of effort. Learning which of your segments performs the best and why is crucial. It allows you to upsell and target prospects better. Moreover, understanding which segments convert more can help you personalize your advertisements.
- Highlighting underperforming segments and devising strategies to revitalize them. Your segments’ performance will differ, and that’s fine. All you need to do is to identify those that underperform and develop strategies to enhance them.
- Identifying churn rate. A high churn rate indicates that you are not targeting the proper clients, or that they are dissatisfied with your product or service. Analyze which aspects have to be improved to keep your customers with you.
A robust segmentation plan is essential in distinguishing yourself from the competition.
Why? Because segmentation enables you to bring the right products and services to the right customers, resulting in better service.
The more refined the segmentation, the better results you’ll achieve.
6. Study your competitors
A competitive analysis is a technique that entails investigating significant rivals in order to gather knowledge of their goods, sales, and marketing strategies.
It enables you to grasp the intricacies of your competition’s operations and find prospective areas where you may outperform them.
It also allows you to remain on top of industry changes and guarantee your product meets — and exceeds — industry standards on a continuous basis.
Three of the most important advantages of studying your competitors involve:
- Understanding where your rivals are falling short to uncover areas of opportunity in the industry by way of testing out fresh, distinctive marketing methods that they haven’t used.
- Learning what’s missing in a competitor’s product from user evaluations, and exploring how you may add features to your own product to address those demands.
- Giving you a standard against which to assess your progress.
Investigate current businesses in the market to learn about their value offer and competitive edge.
Establish your unique selling point to differentiate yourself from them. Determine what attracts your clients and advertise it.
7. Discover industry trends and insights
Reading about trends and other major insights in your industry may help you gain a sense of your environment and decide where things are heading for you and your company.
It is also critical to monitor your customers’ activity, any links between a certain market, and your performance.
With this information, you can understand what’s currently on your clients’ minds — developing strong insights into broad patterns and specific strategies for your business to expand and better serve clients in the future.
However, when everything’s going well, it might be difficult to go down a new road and try anything new.
But responding late to trends can get a competitor to outwit you. You’d have a hard time catching up and you’d slowly lose a grip on executing your plans for the future.
Trends alter industries every day. Knowing what’s coming up and developing your business to keep up with those developments might help you stay competitive.
Load the ideas to your idea management engine
Now that you’ve discovered seven effective ways to identify business challenges to focus on, you can now load ideas to your idea management engine and begin your process of innovation.
Don’t forget that the best way to find out if an opportunity is worth pursuing or not, is to ask yourself a few questions:
- Does the idea solve existing problems?
- Can you offer it at the appropriate market price?
- Is this in line with your target market’s needs and wants?
- Do you have what it takes to manage/sustain the business proposed by this opportunity?
Once these are answered satisfactorily, gather all of the information necessary before making any decisions about whether or not to pursue said opportunities.
In fact, how about you grab a copy of our free ebook that discusses how to organize successful innovation campaigns?
That way, you would learn a step-by-step approach on how to collect and select ideas from a target audience and find challenges to focus innovation on.
