Pivoting a business means infusing new life into a failing business by bringing strategic changes to the products and services. A business pivot is a strategic move and a critical decision that is often made to ensure the business remains viable. It is not a short-term strategy and can have a severe impact on the functioning of the business. Here’s a handy guide to help you understand the concept and how to implement it appropriately.
What is Pivoting Business Strategy?
Pivoting in business refers to changing the overall direction of the venture. It is often done when the current strategies or the services of the company are not meeting the needs of the consumers. The situation can also arise because of a disaster or a crisis. For instance, many businesses had to change their approach after the outbreak of COVID-19 to thrive in the markets. Business pivot can bring a massive difference in the overall strategy and growth of the business.
However, the main aim behind pivoting in business is to survive in the market and cater to the demands of the audience. The pivot strategy also implies that you will have to bring in changes from scratch. You may have to let go of the previous strategies and investments. Business pivot is even done to increase revenues.
When is the Right Time to Pivot your Business?
Business pivot is a crucial strategy that should be decided carefully. You need to understand that it will not create magic and help you get back on track. When a business is experiencing downtime, every decision plays a significant role. You cannot decide to pivot your business unless it is the only option left. Business pivot refers to a dramatic shift in the business’s overall strategy. Before pivoting, companies will have to consider the needs of the audiences. If executed well, it can be highly profitable. At the same time, it involves significant risks and can even harm the operations of your business.
Netflix is one of the classic examples of a pivot strategy. None of the consumers remember that Netflix delivered DVDs to the mailbox. Today, it is well-established as an online OTT streaming platform. The strategy worked for Netflix, but it does not mean it will work for every business model. Here are some of the situations in which it may be ideal for pivoting your business:
- There is not much progress in the business.
- The competition is significantly increasing.
- There is no longer any demand for the product or the service.
- Customers are not responding to your range of products or services.
- The perspective toward the industry is changing.
- The business is not financially viable.
How to Pivot in Business?
Here are a few tips to help you execute the pivot strategy successfully.
A business pivot is not a decision that you can take alone. It makes sense to inform and involve different stakeholders of the business. Consider speaking to the investors and employees and talking to them about the need of pivoting in business. Listen to their viewpoints and get insights on what should be done. It will help you understand if they have the same thought processes or different ideologies.
Define New Goals
You must list new goals when you have already planned on pivoting in business. Conduct market research to understand the latest product and industries. Check the competitors and outline new goals for the industry.
Focus on What Works
Before deciding on a business pivot, you should evaluate your product and services. Keep the things that work and perform the best. At times, the customers may not be satisfied with a particular feature. If that is the case, you may consider working on that feature. You have to understand that no one solution works for everyone. Avoid adding so many features, as it may confuse your audiences. Follow the “less is more approach” and keep what works for your audience.
Understand Your Target Group
Before you proceed with a business pivot, you need to evaluate and determine why your product or services are not working. Chances are that there are no flaws in the product; rather you may have been targeting the wrong audience. In that case, you would be required to change the marketing approach instead of changing the product. Conduct proper market research, surveys, and interviews to better understand your target audience.
Analyze and Strategize
Before you make any decision, you should take time to analyze what has been happening in the industry. Check what competitors are doing and the steps they are taking to reach the market. See if there is anything that you can do better. Besides this, you need to understand that any kind of business pivot or change will not give you ultimate or significant results at once. You will have to wait and follow the entire process. Make sure you strategize correctly and plan all the initiatives that you will take.
Business Pivot Process
If you have decided that pivoting in business is essential, you should follow the process to ensure everything is done accordingly.
- Discover the new idea and customer profile
- Develop a prototype and see what the new changes could be when the business pivots.
- Research and validate if the idea works.
- Successfully plan and create a timeline on how to launch the new changes.
- Do the groundwork and execute the changes.
Act Decisively and Embrace it
Once you have decided on the business pivot model or strategy, you must make decisions quickly. Act wisely and skill up if there is a need. Pivoting in business can be stressful and challenging as you might have to start everything from scratch again. It is a tough decision, and you should consider all the other options before taking this decision.
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