Pivot: Definition, Types, Strategy and Time to Implement It in Business

Have you ever heard of the term pivot? In the business world, pivots are known as a strategy to save a business in order to survive.

Generally, pivots are carried out when a business has shown no progress or compatibility with its values ​​or goals. The goal, so that your business can return to profit.

So, what exactly is meant by a pivot and when is the right time to implement it? Check out the full explanation in this article!

Definition of Pivots

Basically, pivot is a strategy used to advance a business. Quoting from Forbes, a pivot is an action taken to fundamentally change the direction of the business, when the product offered is no longer relevant to market needs.

Generally, pivots are applied to businesses that are underdeveloped or are no longer able to meet existing needs in the market. The goal is to restore or increase business revenue so that it can survive. However, pivots are considered a quite risky strategy because the changes are made from scratch.

Pivot Strategy Types

Pivot strategies are divided into several types depending on the problems faced. To implement an effective pivot strategy for your business, it's best if you understand the types of pivot strategies first.

Market Segment Pivots

Market segments pivot is a type of pivot strategy that is done by changing market segments. With this strategy, you only need to make changes to your target market, not the product or function.

Revenue Model Pivots

This strategy is commonly carried out by businesses that depend on subscription or license to gain. Therefore, to apply it, you need to rearrange the prices of the products you offer.

Customer Problem Pivots

Customer problems pivot is a pivot strategy that is done by changing the function of the product you produce. With this, you only need to change its function so that it can suit your consumers.

Product vs Service Pivots

This strategy is used if the product you offer is too complex for consumers, so you can add it support service so that your product is more useful.

Product Feature Pivots

Product features used if there is a change in consumer needs. With this strategy, you can add product features that suit their needs.

Sales Channel Pivots

This strategy is done by replacing sales channels used in business. Because election sales channels something wrong can have a negative impact on business development.

Technology Pivots

Final, technology pivots is a change strategy on a technology platform, so as to be able to solve problems that occur.

The Right Time to Implement Pivot in Business

Generally, pivots are made on businesses that are considered less developed. For more details, here is the right time to implement pivots in business.

Business Performance Not Improving

Pivot is usually done when a company's business performance shows no progress. This condition usually occurs due to several factors, such as inappropriate target markets, changing consumer needs, ineffective promotions, and so on.

Market Focus Is Not In Accordance with Business Goals

Pivot is also carried out when the company realizes that the market focus has changed and is not in accordance with the value it has. For this reason, the company must change its strategy by selling products that match market needs.

Need Adaptation with Change

A business is required to be able to adapt to all forms of change in order to survive. To do this, companies usually pivot to suit the conditions that occur.

There is an internal conflict within the company

Pivot strategy can also be done if there are problems within the company's internal. With pivots, companies can make major overhauls to overcome these problems.

Lose Competitiveness with Competitors

In business, competition between competitors is a natural thing. However, when your business is always beaten by your competitors, then you have to do a pivot strategy to change the product, service or sales strategy that you apply.

Want to Launch a New Product

When you decide to innovate and launch new products, then you have to reconsider the strategy that you have to do so that your company can survive. The reason is, by launching a completely new product, it means you have to make changes to other things.

So, that's a complete explanation of pivots in business. From the explanation above, it can be concluded that pivots are an important strategy to implement when a business is experiencing setbacks.