In journalism school, they teach you to write reports answering the basic questions: "who," "what," "when," "where," "why," and "how." Show
Defining the steps to a business growth strategy is kind of like answering these questions: you won't have a finished product without them. While no two growth strategies are the same, here are a couple of key questions that you can ask to plan out the steps to your business growth plan. 1. Where are you growing?Businesses can grow in many different ways. That's why it's important to understand what you're actually trying to grow when crafting a plan. Some examples of business growth include:
2. Why are you growing?When looking to grow, there's usually some sort of underlying reason why. Very rarely are businesses just throwing darts at a wall and working on things randomly. Usually, the why behind these initiatives comes from market or industry research. For example, product marketing managers do competitive research to surface potential areas for growth based on what others in your category are doing. 3. What are your goals?What are you trying to achieve? Once you know the area of the business you're growing, you can lay out SMART goals to make sure you're actually meeting the mark. 4. When are you growing?Finally, it's important to understand the timeline behind your growth. Rome wasn't built in one day, and your company probably won't magically triple ARR in a quarter. Set a realistic timeline to work toward and track against as you grow sustainably. There are many ways to grow a business. Which way you choose to expand largely depends on your ambition, your reasons for growth, and the opportunities and resources available. However, two crucial factors for choosing a growth strategy exist. They are:
Based on these factors, strategic tools - such as the Ansoff matrix - suggest four main types of business growth strategies. What are the four major growth strategies?Four main strategies for growth, each with their own distinct benefits and risks, are:
With market penetration, you try to sell more of the same things to the same market. The risks are usually low as you focus on capturing a bigger share of your current market with the products you already have. Learn more about market penetration strategy. With product development, you are introducing a new product into your existing market. You're effectively selling something different to the same customer, potentially encountering greater risks. See more on product development strategy. Another option is market development, where you try to sell an existing product in a brand new market. For example, you may want to segment your existing market or reposition your product in it, or target an entirely different geographical area. See market development strategy. Finally, with diversification, you are aiming to sell completely different goods or services to completely different customers. This is typically the riskiest of options - it requires both product and market development. Read more about business growth through diversification. Other ways to grow your businessEvery business is different. You may need to adapt some of the suggested strategies to suit your particular circumstances. For example, you may want to explore:
You may also want to construct your own unique combination of strategies. The best approach will usually be the one that suits your overall strategic plan. Focus on finding an option that could yield most results from the least amount of risk and effort. Keep in mind that, to succeed, your growth strategy has to be deliberate. Success will require a great deal of research and thorough planning for business growth. Growing your business is fundamental to its survival. But that growth doesn’t happen by accident. A game plan is necessary to achieve your growth goals. That’s where a growth strategy comes in. Overview: What is a growth strategy?A growth strategy is a plan of action to increase a business's market share. If your company is looking to expand, a market growth strategy will enable you to chart your path to expansion, taking into account your industry, your target market, and your finances. The Ansoff Matrix summarizes four high-level business growth strategies employed by companies. The Ansoff Matrix is a framework outlining four strategies for growth. Image source: Author
Whichever growth strategy you employ, you'll likely utilize some business development principles since the goal is to develop the entire organization. Examples of successful growth strategiesTo understand how different growth strategies work, let’s look at some real-world examples. 1. FacebookFacebook is ubiquitous today, but when it launched in 2004, it was one of several social media networks. MySpace was the dominant social media site at the time. So how did Facebook take over? The company used a market penetration growth strategyIt started by focusing on a narrow target customer base, then expanded gradually. Here’s how Facebook did it.
2. AmazonAmazon’s retail dominance began in 1995. Back then, consumers were not used to buying online. Despite that, Amazon grew to billions of dollars in annual sales. What enabled Amazon’s growth? The answer is a diversification growth strategyAmazon was among the earliest online retailers, offering the ability to buy online (a new concept at the time) in a new market: the internet. Here’s the growth strategy approach Amazon took.
3. Dollar Shave ClubWhen Dollar Shave Club launched its razor business in 2012, Gillette had a commanding share of about 70% of the U.S. market according to Entrepreneur magazine. In 2019, Gillette’s market share had eroded to about 53% according to a CNBC report. Meanwhile, Dollar Shave Club’s growth prompted Unilever to buy it for $1 billion. How did Dollar Shave Club defy a much larger competitor? It employed a market development growth strategyThe key to Dollar Shave Club’s success is that it could offer a lower-priced alternative to the leader by selling direct to the consumer, which represented a new market for razors at the time.
4. GoogleGoogle is renowned for its namesake search engine, but what fueled its growth into the company now called Alphabet is its outsized revenue. How did Google do it? It used a product development growth strategyGoogle started as a business-to-consumer (B2C) company offering a search engine. But it needed a source of revenue. To achieve that revenue, it developed a new product, AdWords, targeted to businesses that had to pay to advertise.
How to develop your own growth strategyNow that we’ve looked at examples of how others achieved growth, we turn to you. Where should you start with your own growth strategy? 1. Define your goalsMost business leaders think of revenue growth. But how can you increase revenue? By acquiring additional customers? Offering new products? Charging more for existing products? Think about the goals that make sense for your business and what stage of the business life cycle you're in. If you’re a new company, customer acquisition may be the key goal of your growth strategy. If you want to expand into the B2B space, you’ll have to consider factors like what it takes to perform B2B sales and to market directly to businesses. When defining your goals, be sure they're measurable. To know if your plan is on track, you need a quantifiable target. For example, you may set a goal of a thousand new customers by the end of the next quarter. 2. Keep timelines shortWhen setting your goal, it should be achievable within the next quarter or month. Why so short? Shorter timelines allow you to go through the planning process quickly. Since you’re working on near-term, achievable goals, you don’t have to waste time trying to figure out where you’ll be a year from now, and you can continually refine your plan for successive timeframes. 3. Perform market researchYou need to perform research to validate the approach you’re considering for your growth strategy. Otherwise, you’re flying blind. Where is the industry going? What’s the competitive landscape? What are customers doing today? By gaining insights through research, you’ll be able to better assess risks and collect data that can be used to inform the next step. 4. Create a forecasting modelA model forecasts the trajectory you’re trying to achieve through your growth strategy. This may seem like unnecessary work (I disliked doing this for the products I built), but it serves two important purposes. First, it measures progress towards your goals. Are you hitting the growth numbers you’re targeting? The model can show this. Second, the model serves as a communication tool to get buy-in on the plan. For example, if you rely on a sales team to acquire customers, getting them to agree to the goals in your growth strategy model is key to increasing the chance of success. And, the feedback you’ll receive is invaluable to ensuring the model’s accuracy. 5. Identify actionable stepsNext, you need to transition from high-level goals to actionable steps. This means identifying the tactics to achieve your objectives. For instance, you may need a go-to-market strategy, especially when launching a new product. If customer growth is a key objective, CRM software can help you manage your customer relationships. Once you’ve outlined the nuts and bolts of your growth strategy, you should have concrete next steps in place to begin executing it. A last word on growth strategiesDeveloping a growth strategy is important, but even more so is executing on that strategy. Use the actionable steps and measure results against the forecasting model to ensure you’re headed in the right direction. If not, don’t hesitate to adjust. With a well-developed growth strategy in hand, you can increase your chances of successfully expanding your business. Alert: highest cash back card we've seen now has 0% intro APR until 2024If you're using the wrong credit or debit card, it could be costing you serious money. Our expert loves this top pick, which features a 0% intro APR until 2024, an insane cash back rate of up to 5%, and all somehow for no annual fee. In fact, this card is so good that our expert even uses it personally. Click here to read our full review for free and apply in just 2 minutes. What type of strategy is growing the business from existing customers?A market penetration strategy directs the firm's efforts toward existing customers and uses the present marketing mix. In other words, it attempts to get current customers to buy more.
Which strategy pursues growth within existing business?1. Intensive Growth Strategies: The firm pursues intensive growth strategies with an objective to achieve further growth of existing products and/or existing markets. These strategies are also called 'organic growth strategies'.
What is customer growth strategy?Customer growth is what occurs when customer-centric businesses use successful customer engagement tactics. It is used to improve the customer experience and provide goods that are suited to the demands and interests of its consumers.
What are the 3 growth strategies?Three customer growth strategies are presented below: (1) Growing the core business, (2) Growing by sub-segmenting customers and (3) Growing adjacent opportunities.
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