Within any industry, corporate organisation, SME or sole trader business, indeed, at every level of business, there must be an aspiration for growth. Having a growth strategy is about taking your business to the next level, increasing sales and number of customers, or striving for excellence with the products and services you deliver.
‘Oh, I think we’re making enough sales, so we have no plans to grow,’ is not something you expect to hear from anyone in business. In fact, if you have no plans or strategy to grow, you’ll start to lose your existing customers through natural attrition, and slowly but surely, your business will fail. The momentum of your business is about the energy you put into it. If you are driving strategies to improve and increase sales, your results will reflect this, as will your results if you sit back and cruise along with no push for growth.
There are several traditional approaches to growth strategy, and you can adopt any or all of these at the right time, contingent to your financial situation, the current market, the competition, and even government regulations. And remember, when implementing any growth strategy, full due diligence and market research must be completed before starting anything new. This sounds pretty obvious, but even huge corporates have made mistakes – you’re never guaranteed to get everything right, but a little research will go a long way!
Let’s look at the most traditional and effective growth strategies to consider for your business.
1. Market Penetration– Existing Products into Existing Markets.
This is considered to be the easiest way to grow your business. How can you increase your market share with your existing products? Is it realistic for you to increase turnover by 20%? What will be your market share if you achieve this? Keep this vision strong, know your market and your competitors, and, when making decisions ask yourself, ‘will this action help me to increase my market share to 20%?’
This strategy can include improving the quality of your products, looking at competitor’s pricing, finding ways to more efficiently and cost-effectively produce products, and adding value to make your product highly desirable. Does the packaging need updating to help you reach a higher percentage of your target market? Could you reduce production or delivery costs? Examine ways to increase your sales or profit margin within your existing markets with your existing products.
2. Market Expansion– Existing Products into New Markets
What are the ways you can move your products into new markets? What unique value are you offering compared to your competitors already strong in those markets? Can you find distributors, consultants, or sales reps who can sell your products nationally or internationally?
When considering market expansion for your growth strategy, be aware that government regulations may be different than what you are used to. Look at competitors in your new market closely, and assess their advertising and marketing strategies. How do they compare? Could your potential customer’s needs be different to what you know from experience in your own market? Never assume that what is working for you now will work in a different environment or economic climate. A good example would be looking to sell products in a different country; your customers will have different wants and needs.
3. Product Expansion– New Products into Existing Markets
When looking for strategic ways to grow, introducing a new product to your current customer base sounds straight-forward. You’ve already got a large active database, so why not sell them something new, right? Think again! Developing a new product is never easy, but that doesn’t mean it’s not worth exploring and implementing. If you have an idea for a new product range you want to market to your existing customers, then make sure you do your research first. How will your new product solve your customer’s problems? Are your existing customers the right target for the new product? Do your due diligence and ensure you know your numbers and product expansion could be a successful strategy.
4. Diversification– New Products into New Markets
Sounds exciting! It certainly can be tempting to invest your time and money into diversifying your product options, but bear in mind your expertise. It’s likely you’ve been working in your industry for several years and you know your current products and services inside out. If you are looking to offer something you’ve never created before, into a market you don’t know, then be prepared to do the hard yards in market research, and consulting professionals who do know the industry you’re attempting to break into. Diversification means starting from scratch in most cases, and that’s fine, as long as you know exactly what you are getting into, how much it will cost and the time it will take to implement and grow your offering in the marketplace.
So, when you’re looking at growth strategies, try putting some of your ideas down on paper, perhaps in a chart or mind map similar to below, so you can clearly see your options in a basic form.
Growth strategy doesn’t have to be expensive. You can start with baby steps, and look for small tweaks that will help your product or service be adaptable to new markets.
Of course, once you have identified areas for improvement, you will need to assess the impact each area will have, and create a budget to put your plan into action. This will also include a marketing and advertising strategy. That’s why a strategic plan is so important; you can plan each step based on your budget.
As long as you are working to a plan and moving forward (no matter how small or large the steps you take), you will be growing your business. And all steps toward growth will have an impact on your business.
“However beautiful the strategy, you should occasionally look at the results.”