How to Find Sources of Growth
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Of course, bookselling isn't the only business that's being reshaped. In emerging markets, technology is enabling businesses to build scale rapidly, while continuing to operate in a very granular way.
Consider a couple of examples from China. Ping An, the country's second largest insurance company with more than 30 million customers, is able to manage a fragmented sales force of about 200,000 agents by using a mobile-based sales management platform, thus overcoming the lack of a fixed-line telecom infrastructure in some regions.
China Merchants Bank wanted to ensure that its distribution footprint followed pockets of GDP [gross domestic product] growth, but was wary of the quality of published data and the time it took to get it. So the bank used night-light aerial photography to identify the brightest areas, reasoning that they were where the economic growth was. It then targeted those key markets in its growth plans.
When technology is harnessed in ways like these, [the sweet spot moves in the direction of finer granularity]. As demand fragments, more tailoring may be required to achieve the same benefit from sales and marketing efforts. Note, though, that as the cost of technology platforms drops, the cost curve shifts to the right. The overall effect is unambiguous: Greater granularity is the way forward.
However, the answer is not just increased granularity. Rather, increased granularity needs to be managed at scale. The question is where to have the scale and where to have the granularity, and how to have the two work in concert.
Excerpted with permission of the publisher John Wiley & Sons, from The Granularity of Growth. Copyright (c) 2008 by Patrick Viguerie, Sven Smit and Mehrdad Baghai.