One of the Alliance for Accelerating Excellence in Science in Africa’s (AESA) strategic goals is to promote innovation and entrepreneurship by transforming R&D innovations into successful businesses, so they create jobs and incomes. This blog provides the knowledge to advance AESA’s strategic goal.
Creating and sustaining successful businesses, most often with limited resources and little or no business acumen, can be incredibly challenging. To help make this process a little easier, I’ve outlined five creative ways to develop business management skills of transformational entrepreneurs and social enterprises, regardless of their background, seeking to take game-changing innovations to the next generation of transformative change.
I recently published “The entrepreneur’s go-to-market innovation strategy“, which highlights the fundamental decision-support tools required to help transformational entrepreneurs and social enterprises reshape industries, transform value chains and drive spectacular growth and profitability, including how to develop: a competitive business strategy, an innovative product or service, an innovative business model, a product investment strategy and a marketing strategy. These are the basic analytical tools required by transformational entrepreneurs and social enterprises to fully understand their competitive landscape and succeed in the long term.
Gaining a competitive advantage
Gaining a competitive advantage requires a critical analysis of the five forces that shape competition, an assessment of market potential and attractiveness, and identifying a company’s strengths and weaknesses, as well as the opportunities and threats in its competitive environment. These analyses are essential to paint a complete picture of the factors influencing profitability within an industry and to establish a strong competitive position in the market.
New Product or Service Innovation
Developing an innovative product or service requires a thorough understanding of unmet customer needs and the identification of market opportunities to align a product or service to the right market (product-market fit). This requires the identification of new product or service opportunities that are focused on delivering customer value to drive growth and profitability.
Business Model Innovation
Although new product or service innovations are essential to achieve a durable competitive advantage, business model innovation drives top-line growth and bottom-line efficiency, particularly in disruptive times. In fact, many businesses with innovative products and a strong technical team eventually fail because they lack an innovative business model to take their new product or service innovations to the next generation of transformative change. Thus, embedding tightly connected and mutually supportive business processes and policies into organizational culture to create, deliver and capture value are crucial in driving highly accelerated growth, thereby differentiating visionary companies from their competitors.
Financial planning is a key component to sustaining business growth and profitability. It supports entrepreneurs and managers’ investment decision making to attain and sustain a competitive advantage. The metrics of such analyses include Return on Investment (ROI), Net Present Value (NPV), payback period and Internal Rate of Return (IRR).
Marketing management encompasses positioning a brand or product/service in terms of its functional benefits, its distribution channels, the timing of marketing messages and the price each customer segment is willing to pay for the brand or product/service. In essence, marketing management entails putting the right brand or product/service at the right place, at the right price and the right time.
Creating and sustaining a successful business for the long-term requires powerful alignment mechanisms that support and reinforce the five components of strategic innovation management including strategic planning, business model innovation, product or service innovation, financial planning and marketing management. Embedding these five components into a company’s game-changing business plan enables visionary entrepreneurs and social enterprises to set themselves up for major success.
Anderson Gwanyebit Kehbila is a Postdoctoral Fellow at the Stockholm Environment Institute and a CR4D Fellow. The CR4D (Climate Research for Development) programme strengthens links between climate science research and climate information needs to support development planning in Africa. CR4D is implemented through the AESA Platform. AESA (Alliance for Accelerating Excellence in Science in Africa) is a funding, agenda-setting, programme management initiative of the African Academy of Sciences (AAS), the African Union Development Agency (AUDA-NEPAD), founding and funding global partners, and through a resolution of the summit of African Union Heads of Governments. CR4D is supported by the United Kingdom Foreign, Commonwealth and Development Office (FCDO formerly DFID), Weather and Climate information SERvices for Africa (WISER) programme and the Africa Climate Policy Centre (ACPC) of the United Nations Economic Commission for Africa (UNECA).