Scouting Your Next Business Growth Opportunity
Manufacturers displayed an abundance of resiliency in responding to the COVID-19 pandemic, and about half say their manufacturing business will be thriving a year from now, according to the 2021 Manufacturing CFO Outlook Survey of middle market manufacturers.
The pandemic sent global supply chains into a state of disarray, sidelined manufacturing trade shows and disrupted traditional business development and purchasing processes. However, the pandemic created business growth opportunities, such as:
- Opportunities to win work from competitors with supply chain issues, especially from those over-reliant on low-cost overseas sourcing.
- New markets that emerged as a result of changes in how we live, work and learn.
So how do manufacturers tap into these unexpected opportunities? How can they find ways to diversify their client base? They can be more intentional about scouting for these business growth opportunities.
Market Research, Self-Assessment Help Focus Competitive Scoping
Manufacturers will continue to find business growth opportunities at the intersection of their operational capabilities, market conditions and potential prospects’ needs. Market research is a key component of scouting and is often underestimated by manufacturers that rely on their existing networks built through sales and trade shows. Scouting has long been a term used in business development, but it has grown in popularity in recent years with a shift in emphasis to spotting business growth opportunities at earlier stages of emerging markets.
It’s essential for a manufacturer to understand their current and prospective end-use markets. It also is vital to determine whether company leadership and staff are ready for the challenges that come with a growth initiative or efforts to transform culture and operations. A business-readiness assessment can be a simple and cost-effective tool that can reap exponential benefits.
Information gathered externally and internally sets the stage for competitive scoping — building a list of prospects for outreach, which includes scouting questions to qualifying leads, which can be nurtured for new business.
Scouting Puts Business Development Emphasis on Fast Growing Sectors
The Delaware Valley Industrial Resource Center’s (DVIRC, part of Pennsylvania MEP) business growth services were born in the Great Recession. In the past decade, the organization has worked with more than 500 companies and 20 MEP Centers around the country with their Lead Generation and Market Scouting services. Its database has grown to more than 200,000 contacts of manufacturers, suppliers, vendors and service providers.
When working with a client, the DVIRC targets as many as 60 companies for outreach and nurturing — derived from conversations on what manufacturers and suppliers are looking for. It’s a bit of a matchmaking process.
For example, one DVIRC client, a precision machine shop, experienced a significant loss of business with the pullback of aerospace and aviation. The company is aggressively pursuing business for similar parts in mining and medicine, two high-growth sectors, and defense. DVIRC conducts outreach to potential targeted companies, and the client picks up qualified leads for nurturing.
Other fast-growing sectors include:
- Pharmaceutical equipment, especially those that might involve vaccine production
- At-home medical consumables
- Food manufacturing equipment
- Nutraceuticals, such as dietary supplements
- DoD and Homeland Security suppliers
How One Manufacturer Has Thrived in Classroom Furniture
Haskell Education in Bala Cynwyd, Pennsylvania, had previously diversified from its core business of making office furniture to also making K–12 classroom furniture. With the onset of the quarantine, Haskell sought out opportunities to position its staff as thought leaders for classrooms of the future. They saw that education leaders, with social distancing and the need to use their entire facility, were demanding portable, modular classroom setups with multiple configurations and interfaces.
Haskell also is exploring a virtual showroom environment to help prospects see the different configurations that exist for the post-COVID classroom. With the right scouting strategies, such as focusing on resource-rich districts or districts with facility improvement initiatives, the company is in position to grow their business.
Emerging Markets Have High Potential for Scouting-Driven Opportunities
Manufacturers are in different places in their recoveries, and those that can identify near-term strategic wins will be better prepared for growth mode. Emerging markets often have the highest potential for scouting, especially when combined with information and contacts for suppliers, deal flow and the buying process of the targeted sectors.
Some 82 percent of manufacturers reported in the 2021 Outlook survey that their operations were interrupted early in the pandemic, and they face a tougher recovery. Still, 48 percent of the survey respondents say their manufacturing business will be thriving a year from now. Of the 18 percent whose operations were not interrupted, 78 percent say they will be thriving a year from now. Scouting will play a big role in that.
The 2021 Outlook survey also revealed that innovation will be a greater focus for middle market manufacturers than risk mitigation. The pandemic also led to more employees engaged in a continuous process mindset; such creativity and problem solving is often not the case during busy times when manufacturers are focused on production efficiency.
Contact Your Local MEP Center for Help Identifying Your Business Growth Opportunities
Business growth in manufacturing traditionally has come along two lines: market penetration, growing with the same product; and market diversification, bringing the same product to new markets or new products to the same market.
Pivots to diversification are likely to increase in the near future as supply chain disruptions and emerging business growth opportunities continue to evolve. This is a rare opportunity for passionate and resilient manufacturers to leverage their competitive advantages. Connect with experts at your local MEP Center to see how to improve your scouting prowess. For the NYC-region, reach out to ITAC today!
This insight is from NIST. For the complete article and to learn more click here.
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