Growing your business is actually easier said than it can be done. Companies of all sizes are prone to combat difficulties and overcome challenges that hold them back from growing. Some companies may offer great products and services but lack a business growth strategy to help outline, articulate, and convey where it is heading.
Other companies start small and stick there but eventually identify that their business survival is unguaranteed. Some start-up companies have even transitioned successfully to prospering large-scale firms. Nonetheless, this article pertains to your concerns on how to develop a business growth strategy that is compelling, dynamic, and paves the way for success.
Tips for Developing an Effective Growth Strategy
- Define the ideal customers and their interests and look for niches that you missed out on earlier.
- Define the values of your business.
- Assess the various forms of customer engagement strategies like customer feedback and customer retention.
- Focus on cost-cutting by reducing expenses and switching to less costly options.
- Set realistic goals and assign a time-limit on accomplishing them.
Growth Strategies for Your Business
Developing a growth strategy calls for some severe coordination on a cross-functional level amongst all your stakeholders. Everybody should be a part of and understand the idea they will be working for.
Intensive Growth Strategies
Part of reaching from point A to B is to devise a growth strategy that provides efficient results from effective work. This means putting in the least amount of risk to acquire the most results. In the first phase of developing a growth strategy, companies should also consider the lowest steps. Each step adds opportunities for fast-paced growth and increases the risks. These are known as Intensive Growth Strategies.
This is the safest growth strategy for companies that require selling current products to the existing customer base. This strategy is ideally achieved by massive consumer goods firms. Another form of market penetration includes searching for means to engage your customers in using your products in different ways and advertising their versatility.
The next step to move up the growth ladder is to think of selling your existing products in higher quantities to other markets in the vicinity. The market development strategy entails offering your current products and services to people residing in other neighboring cities or states.
In this growth strategy, a firm can engage its customers in other ways; for instance, they can start marketing and selling their products on the internet via a website. Companies that resort to the internet can give customers a way to access and avail the products or services in a hassle-free manner and in their homes’ comfort.
With each step up the ladder, the challenges and risks keep adding up. The Product Development strategy entails creating new products to market and sell to your existing customer base and new customers. Companies should prefer selling their new products to their already established customer base. This is ideally less risky than learning about a new market and product simultaneously.
New Products for New Customers
The last phase of Intensive Growth Strategies would be to expand horizons and offer new products to new customers. Obviously, this is the riskiest step of all, but it can take your business a long way ahead if successful.
When choosing any Intensive Growth Strategy, it is essential to know that these rungs come with their own set of risks, efforts, and uncertainties. Hence, we suggest companies take one step at a time.
Integrative Growth Strategies
Suppose all the rungs of Intensive Growth Strategies seem to have reached their saturation point. In that case, you should probably consider growing your business via acquisition or mergers. A common issue is that over 70% of company acquisitions cannot efficiently deliver the expected values. Sometimes, unions may end up very badly too. This is when companies should resort to more viable alternatives, as in this case, Integrative Growth Strategies.
The horizontal integration growth strategy pertains to the concept of purchasing a competitor company or companies. A business that implements this strategy will experience growth and also benefit from eliminating another obstacle (a potential or real competitor) that is likely to risk its business growth in the foreseeable future.
A company acquisition can also relate to buying out businesses that are a component of your distribution channel. This is an excellent way of pushing forth your product range at the cost of your competitors.
A backward integration growth strategy involves purchasing any of your suppliers to have more control over your supply chain processes. This type of integration enables firms to create new products promptly and at a far lower price.
The third classification of growth strategies that was particularly renowned during the 1950-60 era and is not commonly used in the modern world is Diversification. Diversification is a form of growth strategy in which companies acquire growth by buying out other entirely dissimilar businesses from your own. There are two types of diversifications.
This form of diversification occurs when businesses expand or add to their current product or market lines. The companies begin to manufacture products or enter new markets/industries that have similarities with the existing business industries.
This form of diversification pertains to companies expanding or adding product lines and entering new markets/industries that are entirely new or unrelated to the current business industries.
Diversifications are rarely considered as a viable option in the modern era, mainly because of cut-throat competition. When companies have tried or failed all other growth strategies, diversification is probably the last resort and the riskiest and most problematic of all.
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