No one starts a business to stay at the same level. If you are like most business owners, your dream is for your company to be a reputable and huge brand in the future. That can only happen if you constantly pursue growth for your business.
Quick Links
To do that, you need to employ the right growth strategies for your type of business. That means figuring out the right course of action to attract more customers, gain a bigger market share, and obtain a competitive advantage in your niche.
Every business is different, so there is no one-size-fits-all strategy to grow a business. However, if you want to fast track your growth, it boils down to these 4 business strategies.
1 Market penetration
If you are selling your products in a highly competitive market, the solution would not be to withdraw your products. Otherwise, you will be giving in to the competition and risking the failure of your brand. Instead, you need to devise ways that you can penetrate that market, sell your products more, and dominate a good share of that market. This strategy aims to outdo the competition. Remember that your competition might also be thinking the same, it is good to be ready with creative ideas to give a fair fight. Here are some tactics that you can employ.
- Increase the attractiveness of your products by dropping prices
- Increase promotions and tie your products with discounts and free giveaways
- Increase the number of dealers and retailers to ensure that your product is within reach for the customers
- Advocate for more usage of your products– Think toothpaste brands encouraging people to brush their teeth two times a day.
2 Market development
Once you have dominated a particular market, the next logical thing to do is to apply the tactics that you have learned to sell your existing products or services into new markets. This could be a new geographical area or target an industry-related demographic. Remember that you are venturing into new territories, thus you need to do proper planning. For you to succeed, the following considerations are necessary.
- You need to consider if the market is attractive for your products. You will need to do thorough market research on the markets that you have identified.
- If you are moving to international markets, are your products adaptable in those countries?
- If you are expanding internationally, you will need to hire people in those countries; do you have the resources to do that?
- Do you have the capability to manage international teams? This can be quite a challenge, so you will need viable solutions. If you plan to expand in Germany, for instance, you can hire an employer of record for Germany, in which case your workforce is managed efficiently for the local market. In addition, you eliminate the need to understand foreign labor and tax laws.
3 Product development
One way to dominate the market is by always listening to your customers and aiming to satisfy their pain points. As you know, customers’ needs change rapidly, and the only way to keep up with them is by continually being innovative. This strategy involves developing new products to accommodate the customer’s changing needs in your existing market. The advantage of using this strategy is that your brand is already known in your existing market. There are several ways to go about this strategy. For starters, you can create entirely new products. Secondly, you can add a feature or modify the existing product. Lastly, you can develop other models for your products, like a mini or larger version of the product.
4 Diversification
This is a more risky business growth strategy as it involves developing new products to sell in new markets. This allows a business to expand its reach to increase sales avenues thus increasing profits. A company can choose to take any of the following directions.
- Horizontal diversification– Develop new products that are unrelated to your current products, targeting the existing customers
- Concentric diversification- Develop technically and/or commercially related products to your existing products, targeting a new market
- Vertical diversification– This involves combining two or more production stages previously done by different companies. For instance, if you are a construction company, you can move to start selling construction materials.
- Conglomerate diversification– Develop new unrelated products to the existing ones, targeting new customers.
Conclusion
As shown above, business growth can take any of the four growth strategies. It is up to you to assess your capabilities; conduct market research to decide which growth strategy is worth pursuing for your business.