Growing a business is critical to its success, but it requires more than wishful thinking. A long-term strategy aimed at business expansion is required.
WHAT IS GROWTH STRATEGY?
Growth strategy is a plan or blueprint that addresses how a business must evolve to meet current and future challenges, and achieve its growth objectives.
Depending on the nature of the firm and its inherent strengths, there are numerous strategies to promote expansion.
Here’s an overview of the strategies you can adopt to give your business a boost.
MARKET PENETRATION
This entails intensifying sales in the existing market to gain customers from competitors and acquire a greater market share.
It’s a low-risk strategy that includes increased promotional and marketing activity, competitive price adjustments, minor product improvements, and improved distribution channels.
MARKET DEVELOPMENT
Market development focuses on introducing existing products and services to new markets.
It can involve finding unique applications for products, which organically opens up new opportunities. Alternatively, it can be geographic expansion into previously unexplored markets on a national or international scale.
As market development doesn’t entail producing and marketing a new product, it involves less risk.
DIVERSIFICATION
This is achieved by introducing new products and services to unexplored markets. When implemented correctly, it can expand the reach of the business, increase sales and achieve greater profits.
As diversification involves developing and marketing new products to previously untapped markets, it carries comparatively high risk.
PRODUCT DEVELOPMENT
Product development is the launch of new products or services into prevailing markets. It’s the ideal growth strategy to adopt when existing products have become outdated.
Investment is often necessary for the research and development of the product. It’s also needed to acquire the rights of a product or purchase and brand a product. The in-depth knowledge of the market offsets risk.
OUTSOURCING
The outsourcing of non-essential functions to third parties improves efficiencies and saves time and money.
Handing over systems and procedures outside your area of expertise enables the focus to move to key company skills, hence driving growth.
STRATEGIC PARTNERSHIPS
Setting up strategic partnerships with complementary businesses can maximise resources, reduce workloads and facilitate access to diverse customers and markets.
It’s a realistic growth strategy incorporating acquisitions, mergers or formal/informal corporate alliances.
