If you own a business, then there must be a point in time when you think about taking things to the next level.
Growth is an expected phase of business. Those who have already done it will agree. Exploring new paths, working on innovative ideas, doing new things, all these things are a part of life and the same is true for business as well.
If you’re actively engaged in scaling your business and exploring new ideas it means you are looking for growth strategies to apply to your business activities.
Here’s a look at well-known business growth ideas that scale.
Focus is on existing products and services in an existing market.
Market penetration is simply a focus is on existing products and services in the market. Let’s suppose your product or service has brand recognition and is purchased by customers in your niche, but you want to boost sales and reach more customers (in that same market).
It’s likely that some people in the market you serve are unaware of your products and services. Consequently, in-depth market penetration will increase brand awareness and reach. This can be accomplished by adding new distribution channels, decreasing retail price (i.e., penetration pricing), making product improvements and reviewing competitive customers and distribution.
Promote your existing products and services in a new market.
Also known as market development, market expansion deals with promoting existing products in a new market. When sales to current customers in a specific market have reached a point of saturation, you can expand your customer and market base.
Expanding your market relates to exploring new avenues. However, be clear on the following factors: your current operational market, if any other markets are open to your products and services, potential markets you can easily reach and the potential of a market to offer great sales and growth opportunities. Using your knowledge, experience, goodwill, and contacts, you can easily plan to capture a potential new market.
Develop a new product or service for existing customers.
Also known as product development, product expansion is a good option if you want to develop a new product for existing customers. In this case, modify current products or create an entirely new product. Keep the following in mind: your competitive environment, customer requirements, and the overall inclination of the market. These factors will determine the overall success or failure.
Customer needs are determined by variables like cost, quality and time. Test what works best for a new product. A fast-paced new release strategy is used often by technology and consumer packaged goods (CPG) brands. Every day we wake up to new app features, upgrades, and new and improved beauty and hygiene products. Improvements of an existing product offer some newness to current customers.
Cater to an entirely new segment of the market with a new product or service.
Diversification involves catering to a new market segment with a different product altogether. You can achieve product diversification in two ways: add new products to existing ones and/or expand an existing product line with similar products.
A good example of diversification is Apple. They successfully entered the highly competitive mp3-player, smartphone, and online music business. Meanwhile, Alphabet is not merely a holding company for Google. They’ve diversified into online advertising, the Android operating system, smartphones, life sciences, biotech, and even driverless car initiatives.
Diversification is different from other growth strategies in the sense that it requires a company to acquire new skills, product development knowledge, resources, technologies, and insights into market behavior. It is similar to starting a business from scratch since there is generally a lack of prior experience.
Diversification is only a desirable choice when your current customers are loyal, and something new is delivered that is high in quality, a good price, and supported with sufficient promotion.
Mergers and Acquisitions (M&A)
Purchase or merge with another business.
Here two companies join hands and merge, consolidate, purchase assets, etc. with each other’s consent. When you purchase another company, it’s called an acquisition.
For example, a business may purchase most or more than 50% ownership stake to gain control over another business. This measure can increase market share, reduce competition, add new product offerings and reduce costs–on a global or local scale.
Acquisitions are only a desirable move when your current customers are loyal and a new release can be launched that is high quality, a good price, and supported by adequate promotion.
Acquisitions are beneficial since you take on the existing workforce, a loyal customer base, tangible and intangible assets, and a good brand name. Since large businesses have enough resources to make big-ticket purchases, acquisitions are considered a big-business growth strategy. However, it can be accomplished by small business who work with business brokers to acquire companies that are relative or smaller in size. If you want to venture into new enterprises, then mergers and acquisitions are one of the most accessible options.
Ultimately, acquisitions are only desirable when your current customers are loyal, and a new release is high quality, a good price, and receives an adequate level of promotion.
Business growth on the horizon
Consistent growth requires a commitment to strategic approaches. If you want to achieve consistent levels of growth, attend to your core business while considering areas where you can grow in the future. Adopt one of the above growth strategies if you’re serious about taking your business to the next level.
Mehul Panchal, founder and Chief Managing Director of Filter Concept Pvt. Ltd., is an entrepreneur, business adviser, mentor, speaker, writer, and gymer. Connect with @mehulpanchal_ on Twitter.
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