Protecting and Increasing Organizational Success
When a product has achieved high success, customer satisfaction, and market share, it’s essential to adopt strategies that not only protect but also enhance the organization’s success. This article explores the most effective strategy to achieve this goal.
Exam Question
You have a product that has been highly successful, has very happy customers (very low satisfaction gaps), and commands enviable market share. What should you do to protect and increase your organization’s success?
(choose the best answer)
A. Continue to enhance the product, adding features to keep the product’s customers happy.
B. Implement new features that will increase customer lock-in to protect market share.
C. Use profits from the product to buy competitor organizations to increase your market share.
D. Use profits from the product to look for new markets with larger satisfaction gaps.
Correct Answer
D. Use profits from the product to look for new markets with larger satisfaction gaps.
Explanation
Correct Answer
D. Use profits from the product to look for new markets with larger satisfaction gaps:
The most strategic approach is to leverage the profits from your successful product to explore and enter new markets where there are larger satisfaction gaps. This approach allows the organization to diversify its portfolio, reduce dependency on a single product, and tap into new revenue streams. By identifying and addressing unmet needs in new markets, the organization can replicate its success and achieve sustainable growth.
Why the Other Options Are Less Effective
A. Continue to enhance the product, adding features to keep the product’s customers happy:
While keeping customers happy is important, continually adding features can lead to feature bloat, increasing complexity and potentially diminishing user experience. Additionally, this strategy does not diversify risk or open new revenue opportunities.
B. Implement new features that will increase customer lock-in to protect market share:
Increasing customer lock-in might protect market share in the short term but can create customer dissatisfaction if the product does not evolve with changing market needs. This approach focuses more on retaining existing customers rather than expanding the customer base.
C. Use profits from the product to buy competitor organizations to increase your market share:
Acquiring competitors can be risky and costly, and it does not guarantee long-term success. It can also lead to challenges in integration and cultural alignment. This strategy focuses on market share rather than exploring new opportunities for growth.
Benefits of Exploring New Markets
Diversification: Reduces the organization’s reliance on a single product, mitigating risks associated with market saturation or changing customer preferences.
Growth Opportunities: Tapping into new markets with larger satisfaction gaps can lead to significant growth and revenue potential.
Innovation: Entering new markets often requires innovative approaches, which can drive the organization’s overall innovation capabilities.
Sustainability: Expanding into new markets ensures the organization’s long-term sustainability by continuously finding new avenues for success.
EBM Framework Insights
Current Value (CV): Focusing on customer satisfaction and market share is crucial, but exploring new markets can provide additional value.
Unrealized Value (UV): Identifying and addressing larger satisfaction gaps in new markets uncovers unrealized value and growth potential.
Ability to Innovate (A2I): Entering new markets fosters innovation by challenging the organization to develop new solutions and approaches.
Time to Market (T2M): Efficiently entering new markets can enhance the organization’s time to market for new products and solutions.
Relevance to the PAL-EBM Exam
Understanding how to protect and increase organizational success by leveraging profits to explore new markets with larger satisfaction gaps is crucial for the PAL-EBM exam. This knowledge demonstrates the ability to apply strategic thinking and the EBM framework to drive long-term growth and sustainability.
Key Takeaways
- Leveraging profits to explore new markets with larger satisfaction gaps is the most strategic approach for long-term success.
- Diversification, growth opportunities, innovation, and sustainability are key benefits of entering new markets.
- Focusing on unrealized value helps uncover new growth potential and ensures continued organizational success.
Conclusion
To protect and increase your organization’s success, use the profits from your highly successful product to explore new markets with larger satisfaction gaps. This strategy ensures diversification, fosters innovation, and drives sustainable growth. For more information on preparing for the PAL-EBM exam, visit our Professional Agile Leadership PAL-EBM™ Exam Prep.