Market Research is Essential Prior to Capacity Investment Decisions

What To Do When Your Company Reaches Capacity Limits? [People, Facilities and Equipment]

Status Quo Strategy

You selectively determine what sales opportunities to pursue in order to optimize available capacity.

This short-term strategy will lead to trouble mode and storm clouds will eventually appear on your horizon.

If market research proves a total available market that is growing or significantly higher than your available capacity, then status quo is a high-risk strategy.  When your market share declines you will become a higher cost producer in your category.  This opens the door to growth mode competitors who will become more attractive to your customers and employees.

Growth Strategy

You aggressively pursue all sales opportunities that match your ideal customer profile.

If market research proves a total available market that is growing or significantly higher than your available capacity, then lower your risk by implementing a growth strategy to maintain or increase your market share.  You will improve your position as a low-cost producer in your category.  This will spell trouble for your competitors as you become more attractive to their customers and employees.

If you opt to invest in more capacity in order to elevate a key aspect(s) of your business, you will also need to invest in skill development, process enhancement and productivity tools in order to capitalize on your growth opportunities.

Market Research Competency Is Essential

Without the appropriate market research competency [in-house or external], you won’t be able to make objectively correct capacity investment decisions.

By John Bernardi