According to market research, growth is no longer a goal for firms; rather, it is an essential requirement. To grow your business, you need a good business growth strategy. The question is, however, what defines a business growth plan, and more importantly, what kinds of business growth plans prove most fruitful? Keep on reading if you’re interested in finding out more.
This complete guide will walk you through the best ways to grow your business and help you plan a path to success.
What Exactly is a Growth Strategy?
Simply put, a growth strategy consists of a set of measures taken to boost a company’s earnings and market share. It’s the basis of a solid foundation and the requirement for a successful market expansion. Above all else, it is critical to the success and growth of your business. Your number of clients and bottom line are the two variables most influenced by your growth plan.
If you want your business to thrive in the long run, it’s not enough to increase your customer base or your revenue; you also need to keep your expenses in check. For a company to be successful, it needs to grow and make money at the same time. Onpassivebusiness.com employs growth strategies for expanding its business.
4 Types of Business Growth Strategy:
1. Market Expansion or Development
Existing products are sold in a new market as part of a growth strategy known as market expansion, or market development. Many factors should be considered when a company is seriously considering expanding into new markets. First, there may be little place for expansion in the current market due to the level of competition.
No matter how well a product performs, sales and profits will remain flat if the company is unable to expand into new areas. A market expansion strategy could also be used by a small business that finds new ways to use its product. If you are finding this to be challenging, virtual CIO recruitment could be one of the solutions.
2. Market Penetration Strategy
A market penetration strategy is used when a company wishes to promote its current products inside the same market. Many experts in the field of small business management agree that increasing one’s market share is the only method to expand one’s business while keeping the same items and target audiences.
One way to get more of the market is to cut prices. For example, if there aren’t many differences between products in a market, a lower price may help a company get a bigger share of that market.
3. Product Development
Product development is a growth strategy that focuses on the creation and commercialization of new products. It is not about increasing your consumer base by extending into new markets. Instead, it means making your products better so you can get more customers in the same market segment.
Imagine a place that only offers ice cream for dessert. Adding waffles to the menu may encourage more repeat purchases from current consumers. To come up with new products, you should do a lot of research on what people want and what your competitors are doing.
Diversification is the most risky way to grow out of the four options. This strategy involves putting a new product on a market where you may not have much experience. This could involve introducing your items to new regions and explaining their advantages to the local populace.
Without help from experts in growth marketing, it’s likely that you’ll fail, but the chance of a big reward may be worth the danger. When markets are tough and competition is high, many businesses choose to protect their main business while also looking for new opportunities.
Who can Benefit from it?
No matter what level of business a company is at, it can move to the next level with some kind of growth strategy.
The most likely companies to use a growth plan are start-ups, especially those supported by private investors or funders that don’t want to wait too long to see a return on their investment.
Product development growth plans are frequently used by start-ups because they are typically on the cutting edge of product offerings with unique goods and creative teams aiming to change the world.
Most of the time, small businesses are shining examples of how organic growth works. Due to the fact that they are not a start-up, they have created processes and teams that have allowed them to remain in business beyond the dreadful years.
But since they don’t have as much money as a big company, they need to be smart about how they spend it. As a result, small businesses are more likely to employ a market penetration strategy, competing primarily on price or quality to attract and retain a large customer base.
No matter how big a company gets, it can always keep growing. Corporations often utilise a mergers and acquisitions approach because they have enough cash and internal resources to absorb more teams or business units. They have a lot of internal resources and talent, so they may use any of the other growth tactics as well.
Effective Benefits of Business Growth Strategies:
Some of the benefits to having a good business growth strategy are:
- Growing income – When a company’s business growth strategy works well, sales and income tend to go up, which means that the company’s profit goes up as well.
- Increased shareholder value – If a company has done a good job of implementing a business growth strategy, its share price should go up, which gives investors more confidence and support.
- Increased market share – This is particularly common if new services or products are launched as part of a good business growth strategy. The new item might attract to a different group of people than the ones who already buy the company’s products. This could help the company get a bigger share of that market.
- Specialized skill sets – A corporation may need people with specialised skill sets that were previously unnecessary for the firm as a result of a successful business expansion plan.
Having a plan for growth is important, but putting that plan into action is even more essential. Use the steps you can take and compare the results to the predicting framework to make sure you’re going in the right direction.
If not, don’t be afraid to make changes. If you have a well-thought-out plan for growth, you’ll have a better chance of growing your business.