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How to Pivot When Your Business Needs It


When your business faces challenges, pivoting can help you shift course and thrive. Pivoting is a strategy that businesses use to respond to new opportunities or market conditions. Instead of continuing on the same course, pivoting means changing your strategy (and possibly your business) to capitalize on a new opportunity or avoid a threat. If you’ll agree with us when we say that there are no standard pivot strategies. Every business has its own unique circumstances and will respond to those circumstances in different ways. When considering how to pivot your business, there are three main questions you’ll want to ask yourself first: What are my company’s strengths? Where is the greatest opportunity for my company? And what are the biggest threats to my company?

What does a pivot look like?

When companies pivot, they often change their products, services, strategy, or the customers they serve. They may also shift the way they make and deliver their products. Let’s take a look at some real-world examples of businesses that successfully pivoted their business. In 1995, the founders of the Italian coffee company Illy decided to expand their brand into the U.S. coffee market. They brought their high-quality espresso beans to U.S. consumers as a premium alternative to cheap coffee. This shift led to huge growth in the American coffee market, making Illy one of the best-selling coffee brands in the U.S. Google made the shift from a search engine to an online advertising platform. And Facebook went from a social network to a marketplace.

Why is pivoting important?

Businesses don’t pivot because it’s fun. They pivot because they need to respond to a threat or recognize an opportunity. Through the process of pivoting, businesses can discover new opportunities to grow and thrive, as opposed to just surviving. By pivoting, your business can pursue new opportunities — like new customers, new products, or new markets. It can also address threats to its continued success by repositioning to meet new demands. This flexibility allows a company to survive and thrive during difficult periods. You may also be able to pivot your business to raise new capital. Investors are more interested in businesses that are agile and responsive to new opportunities — making a pivot could help you land funding.

When to pivot your business

There are a few common signs that might indicate it’s time to pivot your business. If your sales are declining — for example, if the market for your product has slowed. Or if the cost of serving your customers is increasing — for example, if your products are too expensive for your market. Or if your customers are changing — for example, if you’re losing sales to a new generation of customers. Or if your company’s resources are limited — for example, if you’re investing all of your cash in one product line. If you’ve encountered any of these challenges, then it might be a good time to pivot your business.

How to pivot your business

There are a few ways you can pivot your business. The best way to pivot your business depends on your unique situation. To figure out which strategy is best for your company, answer these three questions: What are my company’s strengths? Where is the greatest opportunity for my company? And what are the biggest threats to my company? Once you’ve identified the best opportunities, threats, and strengths, you can decide how to pivot your company to meet those needs. You can change your products or services, the way you deliver your offerings or the customers you serve. Or, you can use a combination of these strategies to pivot your business.

3 ways to pivot your business

Switching your products or services - If your market is declining for a certain product or service, you can pivot by offering a new product or service. Switching your delivery methods - You can also switch how you deliver products or services. Shifting your target customers - Finally, you can pivot by switching who you serve, such as going from a B2B (business-to-business) focus to B2C (business-to-customer) or vice versa. Let’s go over each of these strategies in more detail: Product pivot - This involves switching what you produce, such as moving from making bags to making wallets. A product pivot often creates less competition with other businesses and allows a company to go after new customers without becoming a different company. Service pivot - A service pivot involves changing how you deliver your product or service. For example, a business that makes bags may decide to become a manufacturer for other companies. This allows the business to scale up without having to acquire new raw materials or invest in new machinery. Marketing pivot - Companies can also pivot by shifting their marketing strategy. For example, a small business may pivot from local marketing to digital marketing to reach a larger audience.

Conclusion

Pivoting your business to address challenges and capitalize on opportunities is not an easy process. It takes time and effort, and many pivots don’t result in success (though many still do). In order to succeed with your pivot strategy, you’ll need to be agile and flexible. You’ll want to keep tabs on new opportunities and threats and respond quickly — before your competitors do. The best way to achieve this is to have a strategic plan in place before you need it. That’s why it’s important to identify your strengths, opportunities, and threats before deciding how to pivot your business.

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