Written by Bill Finger, Executive Vice President & Managing Director, Kineticos
I’ve yet to meet a CEO who is satisfied with their current growth trajectory. Regardless of the baseline, successful leaders are constantly strategizing on how they can grow more than the prior period. And, while some CEOs can look to M&A and/or geographical expansion to spur on growth, others are forced to look inward for near-term growth potential. For companies that must look inward for growth, conducting a horizon analysis during the strategic planning process may unveil previously concealed growth opportunities that are often times immediately actionable.
Allow me to walk you through what a horizon analysis would look like for a central lab.
Horizon 1 – Gap Assessment of Current, Core Products or Services
Horizon 1 evaluates products or services that are extensions of an existing offering. Horizon 1 additions will improve the depth of product or service offerings and do not require additional capital. For example, if one particular lab’s test menu includes 20 oncology products while the majority of the competition offers at least 40 products, it likely wouldn’t take much of an investment to expand the offering. A routine gap assessment will provide insight into what the competition offers and more importantly, what clients are buying.
Horizon 2 – Competitive Review of Adjacent, Accessible Products or Services
Horizon 2 encompasses a product or services review of what is needed to enter into adjacent markets along with what competitors offer in those markets. Similar to Horizon 1, Horizon 2 requires minimal additional equipment or investment, but increases your breadth of product or service offerings. Using a similar example, assume a current test offering includes automated immunoassay testing for infectious diseases only. The market research is convincing for endocrine assays, and the current platforms and staff are available to offer the new tests. It requires some investment to purchase the reagents, validate the assays and train, but that is a minimal investment for potential large gains in revenue.
Horizon 3 – Assessment of Novel, Vertical Products or Services
Horizon 3 is for those that want (and are able) to enter into new markets and offer new services. This requires investment in new equipment and staff. A vital aspect of Horizon 3 planning is ensuring the products or services being considered are areas that customers need, and more importantly, want. As this is a longer-term strategy, it allows companies of all sizes to plan big and go after their goals.
The key to all of this is to have a clear strategic plan that is based on market, customer and competitive data, not a best estimate. All companies want to grow, and following a logical, data-driven process will allow for the fastest and most efficient growth.
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Bill Finger, Executive Vice President & Managing Director of Kineticos’ Diagnostics Practice, brings 20 years of diagnostics and laboratory experience to the team. His team is focused on helping diagnostic companies maximize their commercial potential at the corporate and product levels while ensuring companies operate in an efficient manner.