Companies are primarily focused on two frontiers – their offer and the market. Both must receive sufficient attention if the business is to achieve success. In reality, however, one perspective usually becomes dominant. As a business owner, you need to consider the implications each one has for your business model.
Business Focuses Explained
Market-focused businesses may look outside the company for the information necessary to develop tactical and strategic decisions. Market focus businesses mean understanding the market base. It means knowledge of your competitors and anticipating their next move. Market focus also means understanding the overall forces and dynamics in the marketplace and knowing how those forces can affect the business.
Product-focused businesses see their offerings and look to improve them constantly. There is a company-wide direction to make a product or service better. The business strategy revolves around differentiation tied to the product.
Market-focus businesses look to recognize opportunities and then take advantage of them, while product-focus ones classify developments that will lead to competitive advantages.
We can find a good sample from the IT industry where a market-focused versus product-focused business is often observed. Look at Apple and Microsoft. Both companies have market focus and product focus businesses as DNA, harmonizing each element into their strategies.
Nevertheless, Microsoft has more focus on the market while Apple leads with a product focus. A new Microsoft operating system (OS) is usually released after a significant change from marketplace demand. New Apple products are released when Apple engineers’ innovation, design, and creative minds come up with something spectacular to wow the marketplace.
So, is one approach better than the other? Not necessarily. However, most companies prefer a market-focused perspective as it can provide a higher probability of sustainable and profitable growth.
Market focus relies on an opportunity. Is there a need for your product? Where do your customers spend money? After knowing that, your next focus is your offer that will satisfy those needs. Product focus relies on creativity and innovation. If you’re not the first to market with an idea, technology, or product, you must offer better value to your offer. Product focus needs greater time and resources for success. As you know, new ideas can be tough to come by.
Find Your Success
For both market-focused and product-focused businesses, three key factors are required to pave the path to success: clarity of vision and action, marketing investment, and situational responses.
Clarity of vision and action. This factor means developing a clear company direction and vision and translating that clarity into daily activities. Market-focused clarity starts with the customers and marketplace, with the decision-making process continuing from there. Understand the customers and create products and services that will meet their needs.
Product-focused clarity. This process starts with developing the next great thing. Create products and services to offer value. Don’t be content being one step ahead of competitors; you can be three, four, or five steps ahead by delivering something unique that delivers value.
Both market focus and product focus clarity will require financing, as do most business initiatives that will upgrade processes or infrastructure to meet your goals. If you’re a startup or SME business, you need a good corporate banking partner to acquire financing for your goals.
Market focus and product focus exist in all businesses. The real question is – where do you want to focus? Because each business situation is unique, thoroughly think about your focus and how it will translate to your bottom line.