Where does growth come from, the corporate development and business development perspective?
According to the leading consulting company, McKinsey, growth comes primarily from three places.
Number one, mergers and acquisitions.
In other words, a company can grow by acquiring or merging with other companies.
Number two, portfolio momentum companies choose the markets they wish to participate in.
If these markets grow, the company grows.
This is true even if that growth benefits competitors equally, a company can also identify areas of
unmet demand and cater to new customer segments for ideas on how to do this.
I suggest looking at the jobs to be done framework by Harvard's Clayton Christensen.
The philosophy of this framework is that customers hire products to do a certain job.
For example, you hire a toothbrush to get clean teeth if you identify jobs that need to be done, you
can create products and markets.
Number three, share gain.
The third primary way for a company to grow is to take market share from competitors as growth marketers
were primarily concerned with number two portfolio momentum, i.e. choosing markets and number three,
share gain, i.e. competing better within existing markets.
As an aside, there are actually three additional sources of growth beyond the ones mentioned above,
these are one divestments to fluctuations in currency and three, changes in portfolio momentum as a
result of M&A.
What I've just outlined above is the sources of growth from the high level corporate development perspective.
In business development, we often refer to these using different terminologies.
The three growth directions are by build and borrow.
So you can buy growth by purchasing businesses or brands, you can build growth by developing your own
products or improving operations to gain share, or you can borrow growth by partnering with other organizations.
The last one is often the most strongly emphasized in business development roles and perhaps the one
that is more overlooked by traditional marketers.
Strategic partnerships can be a powerful way to catapult your company's growth, often business development
gets confused with sales because a big part of the role is selling the company to potential partners.
But the relationship between a company and its partners is quite a bit different from its relationship
with customers.
One of the most important aspects of marketing strategy is something called the value proposition.
But what most marketers fail to realize is that the value proposition isn't just about creating value
for customers, it's also about creating value for partners.
I'll go into more details on this later.