"HRCP has been an important partner and contributor to improving results across our key businesses."
M. Carl Johnson, III, Senior Vice President & Chief Strategy Officer, Campbell Soup Company
Looking across food, health care and consumer durables organizations, it is rare to find a company challenged with too few opportunities to exploit. More often, companies struggle with how best to sort through and prioritize multiple opportunities to make optimal use of people, money and time. Companies also have difficulty weeding out the "hobbies" or distractions that prevent scarce resources from being deployed effectively. Determining the most important strategic growth levers requires a precise understanding of what markets or segments to compete in, what benefits and product characteristics are required to be successful with core targets, and a determination of what winning is worth.
While the need for focus is common, the way companies decide on priorities leaves much room for error. Marketers often exercise too much judgment, rely primarily on financial models with too little consumer foundation, or use incomplete information like attitudinal segmentations as a basis for strategy decisions. Attitudinal segmentations/ landscapes certainly inform marketers on what a consumer desires to achieve under ideal conditions. However, they lack a rigorous behavioral base of the real-world choices that consumers make. As a result, there is no understanding of what current behaviors must change for their Brand(s) to grow and what competitive frame is most relevant when developing a Brand positioning or innovation pipeline.
The Strategic Opportunity MatrixTM is a comprehensive, structured, quantitative approach to evaluating critical decisions. It builds on the MarketMap, which helps us understand how markets are structured and what are the drivers and organizing principles that explain how Brands / products compete. The MarketMap creates an integrated view of consumer behaviors and needs/benefits based on consumers' attitudes and situation-specific requirements. This combined understanding provides marketers a powerful framework to define sources of volume growth for their Brands.
The Strategic Opportunity MatrixTM then enables marketers to determine where and how a company's portfolio should compete. Successful marketers use the matrix to develop a deeper and more precise understanding of growth opportunities by answering critical questions in three broad areas – where to compete, how to win, and what is winning worth?
To understand "where to compete," we first conduct a rigorous quantification that results in the first layer of the matrix highlighting where behaviors are concentrated.
We then drill into each part of the matrix to understand how precisely to win:
Finally, we build in the last layer of the matrix to quantify the upside revenue potential from different portfolio scenarios:
The Strategic Opportunity Matrix™ captures these steps in a rigorous process that provides not only strategic direction, but also a matrix tool which allows marketers to drill into details.
Using this approach for a large packaged goods company enabled us to address the company's most critical issues.
Using a MarketMap to create a holistic, integrated view of behavior across a specific occasion and attitudinal and need drivers, we then developed a Strategic Opportunity Matrix TM to quantify the behavioral dollar value of each intersection of target and need state. We determined how much share the portfolio owned in each space and what upside was possible if their Brands could more effectively source within and beyond its category competitors.
The Strategic Opportunity MatrixTM enabled us to identify the critical "home base" where the Brands had to compete effectively, as their broader competitive set was highly concentrated in a specific target and need state. A disconcerting insight from this analysis was that the company did not have one Brand that competed well in this specific frame of reference, leading us to recommend the critical initiatives the portfolio had to take immediately to address this situation.
Armed with the matrix, we identified how to prioritize targets and need states. We specified what needs, benefits and attitudes should be addressed by portfolio Brands to succeed in priority areas. We then determined how much could be accomplished via repositioning and investment, and where innovation was required to source volume.
The Strategic Opportunity MatrixTM also provided insight regarding the high Brand overlap that existed, helping us to develop guardrails for how the Brands should be deployed to maximize market coverage and minimize overlap. In this case, we had two Brands that overlapped so significantly on needs and targets, we recommended that one of the Brands be eliminated over time as its "sister Brand" more than adequately satisfied the needs of the core targets.
In evaluating strategic initiatives under consideration, we were also able to use the matrix to evaluate multiple ideas, some big and some very small, identifying which initiatives had the potential to drive growth in primary and secondary areas. This evaluation used the detailed analytics behind the matrix, in combination with aligned assumptions about the effectiveness level of the various initiatives. A valuable outcome of this process was the ability to pinpoint "hobbies"-- initiatives in low priority areas with little value to the company, elevating the company's ability to focus resources on primary growth drivers.
The Strategic Opportunity Matrix™ provides a uniquely powerful blueprint for identifying, prioritizing, and quantifying opportunities. It allows marketers to define the competitive frame with much greater precision than other approaches because it is rooted in actual consumer behaviors in the context of consumers' needs and attitudes. It is more actionable than other approaches because it integrates the familiar constructs of need states and consumer segments with behaviors, helping identify what to prioritize, and how to position effectively to win. Importantly, the Strategic Opportunity Matrix™ stands alone in its power to quantify how much winning is worth, and to precisely identify what it will take to succeed. With this as a foundation, delivering "Fewer, Bigger, Better, Faster" finally becomes "Easier."
Read the latest insights from HRCP thought leaders in The Rak Report.