Fertilizer for growth: The delineation of business areas

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Too many companies in the packaging industry lack a “switching point” between the market and the company. This leads to a critical undersupply of valid know-how about current needs in the market and their future development. The consequence manifests itself in slowed growth in the short and long term. The remedy can be the clear delineation of business areas. We will show you why this is the case and how you should react in a growth-oriented manner in order to be able to respond quickly and adequately to market or customer needs.

 

Those who perceive market changes too late can only react to these changes with great delay and, moreover, usually inappropriately. This has fatal consequences for growth.

 

Reasons for the growth brake

A frequent reason for the growth brake is the suboptimal organizational structure of the respective company. For example, there is often a lack of clear boundaries between the business units. Alternatively, there are boundaries, but they make little sense. As a consequence, companies find it difficult to sharpen their competence and expertise in a targeted manner. Fast reactions and the development of necessary synergies are then not possible.

 

Release the brake: Strategically define and delimit business areas

In order to overcome this obstacle to growth, companies should define and delimit business areas or examine and sharpen the boundaries of existing business areas. In this way, they can create a sustainable, comparative competitive advantage for themselves.

Delimited strategic business units represent an autonomous, organizational subunit within the company. They have independent market tasks, pursue their own strategy with their own customer target group, compete with their own competitors and can be specifically located in a product-market matrix.

 

Diverse opportunities

The delineation of strategic business areas generates a number of opportunities. These include:

  • Strengthening the company’s own competence through clear focusing and specialization. Capacities and resources of a market segment can be bundled in the business unit and develop bundled strength.
  • A higher quality level in customer orientation. Characteristic of this is a more uniform and tailored approach to market segments and communications, as well as a clear understanding of the competition.

 

Conclusion and remedy

Being able to react quickly and adequately to market and customer needs is part of a market-oriented strategic corporate alignment. For growth-oriented companies, this is not an optional extra, but a mandatory program.

 

The meaningful delineation and naming of strategic business areas should be integrated into the overall strategy of the company. This may require realignment and change processes that cannot be implemented overnight or without resources. Corresponding financial and time capacities should therefore be planned.

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