Dan Stanek, executive vice president of Retail Forward.

All retailers are interested in growth: growth has become the issue today for American companies. Yet growth doesn't just happen on its own, even if you have a great idea.

"The fact of the matter is, in today's environment, you have to consciously seek growth, you have to actually go out and find it," said Dan Stanek, executive vice president of Retail Forward. Stanek, with over 20 years of experience in consumer marketing and retailing for Fortune 500 companies, spoke with members of the Retail Consortium for Management Education on October 12.

Retail Forward utilizes the concept of mining and a powerful planning tool, the Growth Opportunity Matrix, to advise clients seeking growth.

The Growth Cycle
All businesses go through a predictable growth cycle, according to Stanek. "You might think you're immune to that. Your business might be going great guns now, and you might think it's going to last forever. But it's not. Not unless you do something different…even if you're successful." The growth cycle moves through stages, including introduction, growth, maturity and decline in sales and profitability. To control your destiny, you need to determine where you are in the life cycle of your company.

In a recent study, Retail Forward identified all publicly held retailers in the U.S. and analyzed the top companies in terms of combined rates of growth in sales and profitability. "We found a very eclectic group of different retailers," said Stanek. "They were outperforming the market in a very, very significant way."

Stanek described examples of "growth miners" that are successful yet keep on growing, and keep on driving for growth. These companies are:

n In sync with the trends. Some natural inclinations and natural projections of growth exist. The market is right for concepts that focus around value, young consumers, boomers, the home, and automotive.

n Continually building on their core competency. Beginning with a 'Big Idea,' there is something they are very good at. That translates very directly into the distinct value proposition that they can offer to the consumer, which is then established in the consumer's mind. An economic advantage is created, allowing more investment into building the core competency. The cycle continues, creating a loop that maintains a sustainable growth position.

The Growth Opportunity Matrix
Stanek's company has identified four key dimensions-called Growth Levers- that top retailers use to mine their possibilities for exploration: geography, products and services, customers, and format. In his Growth Opportunity Matrix, each of these dimensions is applied against Growth Strategy Objectives-intensify (Do it Better), extend (Do it More), and diversify (Do it Differently).

Within the context of the Growth Opportunity Matrix, Stanek cited fascinating example after example of what today's top retailers are doing to drive their growth. He also offered these methods:

White Space: Find the white space. What's already being taken? Who's doing what? What is left becomes a void that nobody's filling.

Green Space: Take advantage of the green space: the naturally projectable opportunities that we all know will be there. "Any actuary can tell you what the demographics are going to look like for the next 20 years," said Stanek.

Most people don't place themselves out in front of a trend. It's the simplest thing in the world and they don't do it. They are too busy thinking about right here, right now. You have to be thinking a little bit forward.”

Red Space: Eliminate the Red Space: the self-erected barriers in your organization that prevent you from taking advantage of opportunities. In some companies, it's fear. Risk aversion runs rampant in American companies today, said Stanek." You have to be willing to stick your neck out. Innovation should be everybody's job."

Retail Management Institute - Santa Clara University
rmi.scu.edu