3 Ways You Can Expand Your Business Into New Areas

More CEOs and business chiefs today are exploring a wider range of opportunities for their companies than they’ve ever considered before. That’s one conclusion of the recently completed 18th Annual Global CEO Survey by PwC.

More than half of CEOs surveyed (56%) believe it’s likely that their companies increasingly will compete in new industries over the next three years. Three in 10 entered a new sector or sub-sector in the past three years, and 21% have considered doing so.

Of note, mid-market and smaller companies are following the same trend line as their larger counterparts. More than half CEOs polled, from companies up to $100 million in annual sales, have entered a new sector or sub-sector, or considered doing so, within the past three years, compared with 64% of firms with revenues over $10 billion.

“It’s a focus on customers, rather than traditional competitive boundaries, that is broadening the field of competition,” PwC concluded. “Forward-thinking CEOs are increasingly questioning just what business they’re really in.”

PwC also acknowledged, however, that “the ability to diversify in a focused way presents significant challenges. There are hard decisions about which of the potentially numerous growth strategies make the most economic and competitive sense.”

The consulting firm identified three factors that respondents said are vital to new-industry success.

1. Create value in new ways through digital transformation. Leveraging digital technology effectively in an era that demands it “isn’t possible by tinkering at the edges,” PwC said. CEOs must reconfigure their very operating models—and perhaps their business models—to “ensure they’re not only investing in the right digital technologies, but can deploy them in a smart and effective way.”

2. Develop diverse and dynamic partnerships. As business chiefs work to evolve their companies’ strengths to improve their position for the future, they’re looking to partner with others that can complement or enhance their own capabilities. CEOs surveyed stressed the strategic importance of partnerships, especially how they help companies access new customers and emerging technologies. And the more that companies look outside for innovative ideas, the more likely they are to be top performers in terms of revenue growth and profitability.

3. Find different ways of thinking and working. Diversity and inclusiveness in human capital now are seen as crucial competitive capabilities, no longer “soft” issues. So “having a good mix of talent—and the ability to alter the mix depending on business needs—is critical as companies look to apply their capabilities in more innovative ways, partner successfully and harness technology effectively.

Business leaders increasingly want their companies to step out into previously unconsidered areas of competition to find new growth. These three strategies are helping companies of all sizes succeed in that goal today.