Pivoting a business means to make a shift or turn in a new direction. There are many ways company pivots develop, and many factors that can prompt a business pivot. A business pivot is a key strategic move. As the name suggests, it indicates a dramatic shift in direction of at least one aspect of the business. Pivoting generally indicates a drastic change for the company. Let’s examine some great examples of successful game-changing pivots.
A well-executed pivot can be inspiring to witness. This successful business strategy has helped dying corporations rise from the ashes. Pivots can have dramatic and highly profitable effects for small businesses too. These kinds of changes could be just what your customers are looking for.
Business pivots involve a measure of risk. They require a balance of boldness and planning. The key is to keep part of the business stable support and part agile and moving. The most successful companies achieve this with bold, lateral thinking maneuvers.
Pivots help online businesses adapt to changing circumstances. They are key to making the most of a recovering economy. This type of maneuver has been successful for many different classes of businesses.
Pivots can be a shift in:
- target customer
- market segment
- distribution channel
- pricing strategy
- overall industry
Business pivot examples
Netflix
Netflix is a great example of an online business pivot. Today viewers associated Netflix with binge-watching consecutive seasons of the original Netflix series. The mainstream app Netflix has become a staple in most homes these days.
Viewers easily forget that a few years back Netflix was the service that delivered DVDs to your mailbox. Netflix saw the writing on the wall for DVD viewing. Gradually the platform added a streaming service. Today many consumers no longer own a DVD player but are accustomed to streaming video on their phones, computers, and other devices.
While implementing this change the old DVD by mail service provided stability to the company. Gradually this service became a much smaller portion of the company’s service. Netflix saw a changing market and adapted.
What is more, Netflix saw the need for ever-changing and a wide variety of content. So they pivoted to add a production company and provide a large portion of the content available. Netflix is an outstanding example of Pivoting to take advantage of emerging markets and tech-driven consumer demand.
Originally dubbed “Odeo”, the startup platform was designed to provide accessibility to podcasts. Today it is used as a microblogging platform. It is a favorite for idea dissemination, news, and entertainment. Twitter is widely known and used today. It has become a part of political and social history.
The original version was quickly adapted when Apple launched iTunes. Twitter morphed into a platform to allow people to say what they were doing in real-time. Twitter as we know it launched in 2006 and has become an indelible part of the political and social landscape.
PayPal
PayPal of course started as a method of processing payments. It gained wide recognition as the preferred method of processing payments for eBay. PayPal developed as a brand and product that could stand independent of eBay.
This was a vital change. eBay has gradually drifted out of mainstream use but PayPal has continued in strength.
It was originally dubbed “Confinity” and designed to “beam” payments. It expanded the use of PDAs like the Palm Pilot. PayPal managed to adapt to the world of smartphones and online banking. It is still a preferred method for money transfers worldwide.
PayPal has performed other pivots and expanded into the world of banking alternatives. PayPal has continued to dominate an increasingly competitive industry of personal money transfer services.
Play-Doh
Today a company called Play-Doh is well known and a part of many childhood memories. Many people fondly remember the aroma of opening a new can of Play-Doh.
Few people realize that this beloved item was originally launched in the 1930s as a wall cleaner. The cleaning product was dubbed “Kutol”. Designed to clean coal heating soot from walls, Kutol experienced a decline in sales as gas heating grew in popularity.
The company actively searched for a new revenue stream. They found a teacher had been using the product for arts and crafts classes. This is a nice example of how listening to customers resulted in a new product idea. The release of the old product under the new brand Play-Doh in multiple colors. Play-Doh is now owned by Hasbro and is distributed worldwide.
This bit of history is a great example of thinking outside the box. New product development is costly and time-consuming. Re-envisioning existing products and services could be a successful way to Pivot your business.
Nintendo
Nintendo has reinvented itself many times over the years. Earlier in the 20th century, Nintendo was dabbling in a variety of industries including hotels, ramen noodles, and vacuum cleaners. During the 1980s it ventured into the gaming business that it is famous for today.
However, entering the game industry was not the last pivot Nintendo made. The company has continued to adapt and capitalize on new technologies.
In the 1980s the outstanding success of Donkey Kong and Mario Brothers launched Nintendo past competitors like Atari. Nintendo has continued to pivot according to market and technology changes most recently with the Switch.
Groupon
This startup launched in 2008 introducing the new concept of daily deals. Groupon experienced explosive growth. Most consumers don’t realize Groupon actually got started in 2008 as a consumer activism site known as The Point in 2007.
The Point started the tipping point concept that required enough people to sign up to meet the tipping point. Eventually, that concept morphed into the daily coupon deals that are the Groupon we know today.
Western Union
Western Union was one of the world’s largest telegram service companies. It sold over 200 million telegrams in 1929.
Telegrams quickly lost their market share as the telephone became a standard feature in American homes.
Western Union was able to pivot and secure a new niche as a money wire service. Today Western Union continues to play a key role in the money transfer industry.
Android
Android launched as a cloud-based platform to store photos. It also aimed to interface smart cameras to PCs.
Within a couple of years, they were acquired by Google. Android made a well-timed strategic pivot. They saw market potential and launched into the mobile phone and device market.
Instagram started out as the online company Burbn that allowed users to check in at their favorite spots. It also allowed them to share photos.
This endeavor started as a part-time project for Co-Founder Kevin Systrom to learn to code.
As it became clear that the most common feature was sharing photos, Systrom saw greater potential. He streamlined the app and dubbed it Instagram. 2 years later Facebook purchased Instagram for $1 billion.
Starbucks
Starbucks was founded in 1971 and started out selling espresso makers and coffee beans. By 1982 Schultz had traveled to Italy and returned with a completely new vision in mind. Starbucks pivoted from a coffee roaster to mimic the Italian espresso bar cafes.
Over the years Starbucks has continued to strategically pivot.
It still roasts and sells coffee beans from around the world at its locations and retail partners. Starbucks pivoted to expand the coffee shop on every block.
Further adapting to changing and expanding markets, Starbucks left the European cafe concept behind and moved on. Starbuck found new success in adding drive-through locations as well.
Honda
Honda is known as one of the most successful motorcycle companies. It launched in the US in the 1950s with the intention of competing with Harley Davidson. Americans weren’t particularly drawn to the look of the small Japanese bike. It also wasn’t very comfortable for those long Route 66 rides.
Eventually, Honda was able to pivot to a profitable US market. Honda executives discovered that a few US customers were using the bikes for an unconventional purpose: off-road motorcycling. Honda found a way to pivot to a unique market by selling its bikes through Sporting Goods retailers. In effect, HOnda created a previously non-existent market.
IBM
IBM was known as a personal computing giant. The PC changed all of that in the eighties and nineties. IBM no longer had the stronghold in the market.
IBM chose to make one of the boldest changes ever seen. They halted their core business, changing tactics towards providing IT consulting services. IBM managed to adapt and maximize its best customer relationships. They are now known not as a computer company, but for providing IT consulting services for large organizations.
FAQs on businesses pivoting
What is a business pivot?
A business pivot is a strategic shift in focus, product, or market in response to changing conditions.
In order to capitalize on a more promising market or to survive in a changing environment, this switch is often performed when the current business model is not fulfilling expectations.
Why do businesses need to pivot?
Changing markets, shifting client preferences, and aggressive new competitors all necessitate periodic course corrections for many businesses.
Businesses can benefit from pivoting in several ways, including improved financial performance, the preservation or expansion of their consumer base, and the maintenance of their relevance in their respective industries. Businesses must be quick to adapt to new situations and take advantage of new opportunities.
What are the signs that a business needs to pivot?
Declining sales, a shrinking market share, unfavorable customer feedback, excessive personnel turnover, and shifting industry trends are all indicators that a company has to make a strategic shift.
New competitors, technical developments, and external factors like regulatory changes and economic shifts are all examples of the kinds of indicators that might be used.
How can a business identify new opportunities for pivoting?
Market research, consumer input, and an evaluation of industry trends can all help organizations find promising pivot points.
Moreover, they need to research potential new markets, assess their strengths and weaknesses, and keep an eye on the tactics used by their rivals. Experts and other important players in a given field should be consulted.
What are the risks and challenges involved in pivoting a business?
Losing customers, allocating resources poorly, and dealing with internal resistance are all potential pitfalls of a company pivot.
There is also the risk of the company’s brand being watered down, the complexity of executing new methods, and the unpredictability of the outcome.
How can a business successfully execute a pivot?
A company’s ability to successfully implement a pivot depends on its ability to articulate its goals and strategy, maintain open lines of communication with its stakeholders, and make strategic use of its available resources.
They need to keep the customer at the center of their focus, listen to their comments, and iterate until they find the best solution for them.
What are some examples of successful business pivots?
Examples of successful business pivots include Netflix, which shifted focus from DVD rentals to streaming, Slack, which shifted focus from games to team communication, and Instagram, which shifted focus from location-based check-ins to photo sharing.
How do businesses maintain customer loyalty during a pivot?
To keep customers satisfied during a transition, businesses must keep in constant contact with them, never sacrifice product quality, and listen to their feedback. In addition to utilizing existing connections, highlighting the benefits of the pivot, and guaranteeing a seamless transition, businesses should pivot successfully.
How can a business ensure its employees are on board with the pivot?
To get workers on board with the shift, companies should explain why it’s happening, offer them the resources they need to succeed, and include them in the decision-making process.
It’s also important to be open and sympathetic with employees and to publicly acknowledge their efforts.
How can a business manage its finances during a pivot?
It is important for firms to manage their finances by keeping a tight eye on cash flow, allocating funds to new initiatives, and reallocating assets wisely throughout a pivot. If they need help with the change, they could look for outside funds or form partnerships.
How does a business measure the success of a pivot?
Assessing the success of a pivot entails monitoring key performance indicators (KPIs) including revenue, customer happiness, market share, and employee engagement.
In addition, businesses should measure their performance against established benchmarks and modify course as necessary.
What role does market research play in a business pivot?
When a company decides to make a dramatic course correction, market research is essential for spotting untapped markets, niches, and emerging trends. The information and understanding it provides are invaluable for problem-solving and planning.
How can a business pivot while maintaining its core values?
Businesses can successfully pivot without losing their identity if they make sure their new course of action is consistent with their long-term goals.
They must also ensure that the company’s culture remains consistent by explaining to stakeholders how the change reflects and strengthens the company’s core values.
How can a business manage its brand and marketing during a pivot?
To successfully manage a brand during a pivot, firms must adjust their messaging, focus on the new customer base, and refresh their visual identity. In addition, they need to let customers know about the alterations and their benefits through various promotional channels.
Ending thoughts on these business pivot examples
It is imperative that companies act decisively when executing a business pivot. These famous examples show the success that could result from decisive actions. From Twitter to Play-Doh these examples show what happens when a company is strategically pivoted in a new direction.
Whether your company is the latest app or a brick-and-mortar location, the secret to long-term success is remaining agile. Always be ready to up your game. Be open to what could be the next success model.
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