Do you want to grow your company? But don’t know about business growth strategy or how to Develop a Successful Business Growth Strategy to increase your company’s turnover?
If so, you have come to the right place, as we are going to help you with everything you need to know to Develop an active Growth Strategy for your business.
Once you’ve started a business, your next target will be to grow your business. With growing market competition, growing a business is not an easier task. Companies of every size face challenges that suppress their growth. And that’s the reason approximately 20% of startups fail during the first two years of being open, 45% during the first five years, and 65% during the first 10 years. A company might have a great product or service but the absence of an active business growth strategy will be unable to define, articulate, and communicate where it is going.
We will walk you through how to accelerate business growth with the right growth strategy so that your business can reap long-term success. We will also be sharing the five-step process for creating a growth strategy for your own business. But before moving to How to Develop a Successful Business Growth Strategy, first, we have to understand the term “Growth Strategy”.
What Is a Business Growth Strategy?
A business growth strategy is the high-level strategy roadmap or a deliberate plan that outlines everything a business needs to do, to grow through a holistic and scientific approach.
Perfect growth strategy allows companies to expand their business and drive growth by practices like adding new locations, Franchising opportunities, investing in customer acquisition, or expanding their product line. Any company's target market and industry trends influence which growth strategies need to be implemented. With a clear growth strategy, senior leaders and employees can align their priorities and work collaboratively toward achieving specific goals or become prepared for future opportunities.
Types Of Business Growth Strategies
=> Market penetration
=> Market development
=> Product development
Growth Strategy #1:Market penetration
A market penetration growth strategy involves increasing market share in an existing market through price differentiation — where either you lower your prices more than your competitors to grab their market share or you raise your prices higher than your competitors to acquire a completely new market segment.
It involves practices such as:
=> Increasing sales to current customers by habituating them.
=> Pulling customers from the competitors’ products to the company’s products, while maintaining existing customers intact.
=> Converting non-users of a product into users of the product for increasing sales.
Growth Strategy #2: Market Development
The market development strategy is about increasing sales of existing products or services in previously unexplored markets.
For example, selling goods to industrial buyers which were previously sold only to the households.
It involves practices such as:
=> Adding new channels to expand reach to the new section of customers.
=> Entering new market segments with the existing products.
=> Entering new geographical markets (for example, international expansion).
Growth Strategy #3: Product development
The product development strategy involves launching new products or services for existing markets. The end objective of this growth strategy is to extend the offer proposed to current customers with the aim of increasing their turnover. It involves modification of existing products or the creation of new relevant products that can be marketed to current customers in established markets.
It involves practices such as:
=> Expand sales through developing new products for the existing markets.
=> Create different versions of the same product or create an entirely different product.
=> Develop additional models and sizes of the product to offer more choices that suit the varied preference of the customers.
Growth Strategy #4: Diversification
The diversification growth strategy involves launching new products or services for completely new unexplored markets. Diversification is the riskiest strategy. It holds the greatest risk of failure as it involves marketing, by the company, of completely new products and services on a completely strange market.
Types of diversification growth strategy
Horizontal Diversification Strategy
Horizontal Diversification is about the purchase or development of new products by the company for their existing customer groups.
Vertical Diversification Strategy
Vertical diversification is when the company enters the sector of its suppliers or of its customers.
Concentric Diversification Strategy
Concentric diversification involves the development of a new line of products or services relative to an existing range of products.
Conglomerate Diversification Strategy
Conglomerate Diversification is about moving to new products or services that have no technological or commercial relation with current products, distribution channels, but which may appeal to new groups of customers.
Based on the strategies used and its goal, a company can choose any of these above-mentioned growth strategies.
How to Develop a Successful Business Growth Strategy?
Now we are going to learn the 5-step process to creating your own business growth strategy
1. Define long term Clear goals
Think about the goals that make sense for your business and figure out at what stage of the business life cycle you're in and where you want to reach. Suppose if you’re a startup company, customer acquisition may be the priority goal of your growth strategy.
When defining goals, make sure they're measurable to track the progress.
2. Keep timelines short
Shorter timelines allow you to go through the planning process quickly and allow you to implement desired changes if needed. Since you’re working on short timelines and achievable goals, you don’t have to waste time in figuring out where you’ll be after five years from now, and you can continually refine your plan within timeframes. Once you feel stability, you can extend your timeline and goals as well.
3. Perform market research
You need to perform deep market research to validate the approach you’re considering for developing your business growth strategy. By doing research you will have a clear idea of:
=> Where is the industry going?
=> What’s the competitive landscape?
=> What are customer’s preferences?
By gaining insights through research, you’ll be able to create a more successful growth strategy.
4. Draft a forecasting model
The forecasting model forecasts the trajectory you’re trying to achieve through your growth strategy and measures your progress towards goals. It will give you a clear idea of where you stand on the growth trajectory.
5. Identify actionable steps
At this level of growth strategy development, you need to identify the right actionable steps required to achieve the targeted goal. Suppose if you need to maintain customer data, transaction details, your goal should be to get the CRM software that can help you manage your customer relationships.
By constructing a solid growth strategy for your business, you can inject new life into it – whatever the market, just keep in mind that no business strategy or plan is the same for all; it is important to figure out what works best for your business and tailor growth strategy accordingly.
It’s about driving a consistent strategic approach with an effective growth strategy. This comes down to a strong understanding of market trends, customer preferences, and experimenting with smart and timely marketing tactics to hit your goals.
There’s no magic hack or silver key that’s going to unlock explosive growth for your business overnight but well-executed business growth strategies will definitely win your business a larger share of the market. Good luck!