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18. Nov 2021

New growth despite restrictions

by Alexander Kiock
Weißes Maßband ist um eine Hand gewickelt

What is new about New Growth is that it is aware of a complex world.

DSGVO, climate targets, BGH rulings - these are all recent restrictions and limitations that brands and companies have to face.

But how exactly does a brand navigate today in a world where there are more and more rules? And how does it create new growth in it?

"Every ban is also an innovation driver," said Annalena Baerbock in a TV triell. This quote illustrates that restrictions are not necessarily negative for companies and brands. Necessity is known to be the mother of invention. Restrictions can generate enormous potential for inventiveness. Companies that recognize this opportunity before others do - and preferably before the restrictions come into effect - are the pioneers in their industry. They generate New Growth from it most quickly and sustainably. By realigning themselves, developing new business models and finding new ways of doing things outside their core business.

It is sometimes known that certain restrictions have a positive effect on creativity. Composer Igor Stravinsky, for example, deliberately limited himself to certain pitches and thus playfully explored new worlds of sound. And Steve Jobs sometimes set very hard deadlines for his employees, forcing them to concentrate on the essentials - in Apple's case, on the minimalism. Today, this is precisely the brand's USP.

New growth can therefore be observed in different forms in brands and companies and often arises against the backdrop of social transformations or restrictions:

New growth through a good sense for trends

Those who develop a feel for trends and at the same time keep an eye on emerging restrictions have enormous potential for New Growth. In the automotive industry, there are brands that show how it's done. Volkswagen, for example, positioned itself early on the German market in the field of electromobility. The new climate targets and the impending ban on combustion engines are therefore putting the brand in less of a spotlight than its competitors and are even helping it to grow.

Another example is the e-cigarette brand Iqos. Despite a smoking ban in public places and restaurants, for a long time there was no alternative to the conventional cigarette. In 2015, Philip Morris called out its own transformation - moving away from cigarettes to tobacco heaters. Since then, the company takes emerging non-smoking protection laws or tobacco advertising bans as calmly as the declining numbers of smokers. Iqos occupied the topic "smoke-free future" and the associated niche even before the competition and has been recording positive growth ever since.

New Growth through new product categories

Bring purpose to the product! This could be the motto for companies that have put New Growth on their agenda by introducing new products. Rügenwalder Mühle, for example: a former butcher's shop has become a company known for its vegan and vegetarian offerings.

Due to the climate movement and the resulting recommendation to change one's diet for the sake of the environment, meat consumption has become a personal restriction for many consumers. Ergo, the demand for plant-based substitute products has increased in recent years. Since Rügenwalder Mühle repositioned itself in good time and established its product division even before the great wave of demand, the company is now profiting from a strong brand.

New Growth through new business models

Fewer opportunities lead to more ideas and thus to future growth areas. The energy sector shows how New Growth can succeed through and because of impending restrictions. In view of the imminent halt to coal mining as well as oil production, it makes sense for private individuals and businesses to switch to renewable energies.

Solarwatt would like to facilitate this process and the associated questions regarding the application, storage and installation of photovoltaic systems for its B2C customers*. Therefore, the company has expanded its previous B2B business model to include the new B2C direct customer revenue stream. This is accompanied by new growth that makes a valuable contribution to achieving climate goals and makes green energy generation possible.

Growth - but not at the expense of others

Unfortunately, it happens time and again that companies slip into gray areas that lead to financial growth, but which is carried out on the backs of others - such as employees. This is what happened with Uber and Lyft. In order to offer their services more cheaply than traditional passenger transport companies, they take advantage of a legal loophole and do not hire their drivers on a permanent basis, but let them act as independent contractors. In this way, Uber and Lyft save on additional wage costs. The drivers lose out, because they are excluded from legal protection and also have less bargaining power vis-à-vis their employer or client. This works until individual countries adapt their legislation to close the loopholes. Such business models are explicitly not meant by New Growth.

The new in New Growth

New Growth is characterized by creative solutions. Solutions that look for their gaps early on and thus become pioneers in their discipline. This is because companies that identify new opportunities before others can unleash enormous potential for innovation and generate new growth from it quickly and sustainably.

What is new about this growth is that it is aware of a complex world. It is not primarily looking for quick or linear profit, but is strongly future-oriented, sustainable, digital and aware of social responsibility. It has tremendous potential to find innovative revenue models and generate growth from a strong brand.

This article first appeared on 11/15/2021 in the Absatzwirtschaft

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