No business can afford to ignore the importance of growth in today's competitive market. Growth has become a necessity for businesses to stay afloat. However, achieving growth can be difficult. This is where effective business growth strategies come in. By implementing the right growth strategies, businesses can set themselves up for success.
There are quite a few successful business growth strategies that have worked for top companies. These strategies have been derived from experience and a thorough analysis of the market. While there is no one-size-fits-all solution, it is possible to identify some of the most effective strategies, which can then be used by businesses to achieve business growth.
Using this guide, you will learn the 7 successful business growth strategies and formulate an effective growth plan.
How Do Business Growth Strategies Work?
A Business Growth strategy is all about making your business bigger and better. But there's more than one way to skin a cat when it comes to growing your company. You can try a bunch of different approaches - from developing new products or services to partnering up with other businesses, to expand into new markets. The key is to figure out what will work best for your company by doing some market research ahead of time.
In the opinion of industry experts, the business strategy consists of three levels. Each level of business has a role to play in implementing a great business growth strategy, so it's important to understand how each plays a role. The business strategy consists of three levels:
- The Corporate Level defines the mission of the organisation and directs all downstream decisions.
- The Business Unit Level identifies and describes strategies specific to each market.
- The Functional Level outlines how the company meets corporate targets and aligns with business unit strategies.
How Does an Effective Growth Strategy Benefit a Business?
The growth strategies of a company can affect it in many ways, which is why having an effective growth strategy is so important. Among these benefits are:
Income growth – A successful business growth strategy will increase sales and revenue, increasing profits.
Investor confidence and support – An effective business growth strategy should attract investors by increasing the share price of a company.
Market share growth – A business growth strategy may include introducing new products and services. A company can gain market share by developing a new product that appeals to a different demographic.
Specialised skill development – Successful business growth strategies may require a company to hire specialised employees, previously unavailable.
The 7 Types of Growth Strategies for Business
1. Market Penetration Strategy
For a company to grow its business, it should always consider market penetration. Market penetration is one of the ways that a company can increase its business; this strategy involves increasing the company’s presence in an existing market. You'll find two kinds of market penetration strategies: vertical and horizontal. Horizontal market penetration signifies that a business will spread its brand name to other products, increase advertising, or create a better product. A company that penetrates vertically will produce more, charge less, or introduce new products.
2. Market Development Strategy
Markets are constantly changing. To be successful, companies must adapt and change their strategies, products, and services to remain current with consumer needs. Therefore, understanding the value of your product or service is critical. This can be assessed by understanding your competitors, how your product or service is perceived in the marketplace, and consumer needs. An effective market development strategy emphasises the development of new markets to sustain growth. The best way to do this is to research potential customers, build brand awareness, determine customer needs, and establish a strategic plan.
3. Product Development Strategy
Product development is a crucial component of any business. Business owners and managers will often struggle to identify the best ways to develop new products and determine their place in the market. This can leave a business open to competition without a strong and identifiable brand. Product development can be a delicate process, requiring guidance and effective planning to come to fruition. Product development is not just about creating a new product. It is about creating new products that will complement the existing product line and will ultimately impact the bottom line and contribute to the long-term success of any business.
4. Diversification Strategy
The diversification strategy is dependent upon the growth within the industry, as well as the potential for new industry entrants. If you find that the industry is stagnant and at risk of declining, diversification can be a good way to keep the company ahead of the game. This strategy includes expanding into new markets or offering products in related but new areas of the business to attract customers who may not be familiar with your brand. Having a diversification strategy for your business can be very beneficial if you anticipate that your primary market will slow down or turn inward.
5. Business Partnership Strategy
A partnership brings together two or more businesses for a specific purpose or project. Partnerships make it easier for your business to grow through the completion of work that otherwise would have been too expensive or time-consuming alone. In some cases, businesses form partnerships when they want to achieve their goals but need additional skills, and find businesses that already have them.
6. International Expansion Strategy
A business can reap many benefits from international expansion. This can help you diversify your revenue, expand your market share, and expand your operations. With the right techniques, you may be able to reduce risk while increasing profitability.
Expanding your business overseas comes with a lot of great benefits. For example, you'll have more options for alternative assets and finance. This means that even if one funding source falls through, you'll still have others to rely on. Additionally, you can use this opportunity to expand and develop your company culture. Embracing international financial incentives is a great way to get started.
7. Alternative Channels Strategy
Alternative channels give you more opportunities to grow your customer base since they diversify your customer base. Moreover, with fewer competitors for these customers, you will be able to stand out from the crowd and attract them.
The presence of a physical storefront and an online store, for example, would be considered an alternative channel. You could achieve this with your traditional brick-and-mortar business and still maintain a steady customer base if you have both online and offline businesses.
How Can Business Growth Strategies Be Effective?
Businesses' growth strategies are impacted by both internal and external factors. To have a chance at success, businesses need to focus on developing a strong strategy, having an adequate amount of capital, managing their resources well, and being able to adapt to change quickly. However, many external factors can influence a company's fate, such as the demand in the market, the level of competition in their industry, and government regulation.
Whenever you develop your business growth strategy, keep in mind what makes for a successful strategy, so you can concentrate on internal factors. The key components that make up a successful growth strategy should be analysed.
A solid business growth strategy should always have innovation driving it forward. This can come in the form of new products or services, more efficient distribution methods, or anything else that shakes things up a bit. If your company is already established and doing well in its current market, then a good growth strategy might be to expand into related markets that already exist. This could give you a chance to tap into a new customer base and grow your business even more.
Maintaining the trust of your current and potential customers is key for any business that relies on word-of-mouth promotion. You can make sure that your business growth strategy shows integrity by being aware of your brand and how it is perceived by others. Focusing on brand awareness will help you gain new customers while also maintaining the trust of your current ones.
Business growth strategies must be able to think outside the box. Every company should aim to offer something new and different. This can be difficult for some companies, especially those that are already well-established with their existing products and their relationships with clients or customers. Imagination is always part of a successful business growth strategy. Developing a business expansion strategy is a complex process, so don't get caught up in one size fits all thinking. It is critical to understand how your business will be impacted when deciding on a growth strategy.
4. Engage Existing and Potential Clients/Customers
When developing a business growth strategy, it's important to always keep your current and potential customers/clients in mind. Their needs and wants should be considered, and your business growth strategy should be designed to meet their expectations. Before creating a plan, make sure you understand what your customers/clients want to fulfill their needs and help your business grow.
5. Invest In Organic Growth
Organic growth is the best way for a business to grow in general. This is because when a company expands its market research to new potential target markets, it can achieve sustainable growth. Additionally, organic growth has a positive impact on brand awareness. Even if companies use external growth strategies to develop their businesses, they still typically utilise organic marketing strategies to reach out to their target markets and customers.
What Can a Growth Consultant Do for Your Business?
An expert business growth consultant can improve your business growth efforts by helping you develop and implement strategies to grow your business. The consultant will work with you to identify opportunities and target markets and to develop and implement marketing and sales plans. The consultant can also help you with financial planning and analysis, and with developing and implementing operational plans.
Business growth is what we specialise in at Real Inbound. If you are interested in implementing key business strategies and achieving your business goals, our growth consultancy services can help. Feeling unsure about your current growth strategy? Contact us today to schedule a Business Strategy Review.