The primary goal of any business is to increase stakeholder value.
Every business wants to grow, and there’s a good reason why.
Continued, sustainable growth is important for the survival of your company and for your well-being.
It is achieved through a dynamic balancing of competing values.
Any firm whose business generates significant positive cash flows or earnings, which increase at significantly faster rates than the overall economy, is termed a growing firm.
A growing company tends to have profitable reinvestment opportunities for its own retained earnings.
In order for your business to maximize economic value, you must balance customer satisfaction and competitive market forces with internal cost and growth consideration.
Recommended Article – Reasons Why You Should Grow and Expand Your Business (Business Growth Series 1)
- Recommended Article – Reasons Why You Should Grow and Expand Your Business (Business Growth Series 1)
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- Strategies for Business Growth
Check out this infograhic:
Strategies for Business Growth
Growth comes in about two major ways – through managing current products for growth and adding new product lines.
An organization derives its protections of total sales and profits either from existing business or from forecasts.
Very often these projected sales and profit fall short of what the management or entrepreneur expects to achieve over the given planning period.
To fill these gaps between future desired sales and projected sales, you as an entrepreneur will have to develop or acquire new businesses.
This task you can approach through some but not limited to internal and intensive growth strategies.
Intensive growth strategies involve the identification of those opportunities that are available to you and your organization in its current sphere of operations.
These opportunities can be identified by examining whether there are any further opportunities for improving the performance of the existing operations.
Three Intensive Business Growth Strategies
Intensive growth strategies can offer you an opportunity in three different areas:
A penetration strategy focuses on your firm’s existing product in its existing market.
You can attempt to penetrate this product or market further by encouraging existing customers to buy more of your firm’s current products in your current markets.
This could be attained by encouraging subscribers to increase purchase through gifts, draw away customers from competitors through the use of pricing tactics and making an effort to convert customers.
This growth strategy does not involve anything new for your firm and relies on taking market share from competitors and/or expanding the size of the existing market.
This business growth strategy is based on developing and selling new products to people who are already purchasing your firm’s existing products.
Here there could also be many people who do not own that product; hence you may seek to increase sales by developing new products or improving products for your current customers.
Your company can produce related products via the same technology and distribution channel.
Your company can achieve this growth through
Developing new products:
In this case, your company utilizes the experience with a particular customer group as a source of knowledge on the problems customers have with existing technology and ways in which customers can be better served.
This knowledge is an important resource in coming up with a new product.
Also using product development strategy has the advantage of capitalizing on existing distribution channels or systems and on the corporate reputation your firm has with these customers.
Duplicating ways of using products or their application:
To explain with a brief instance, you can consider dual purpose uses of various packaging and sizes of the same product.
As an entrepreneur you can also find or develop new markets for your current products.
New users and new channels can be identified and developed by your firm or company.
Market development strategies involve selling the firm’s existing products to new group of customers.
New groups of customers can be categorized in terms of:
New geographical market:
This simply refers to selling an existing product in new locations.
For instance, an entrepreneur selling his existing products in Aba could decide to start selling the same product in Enugu, Onitsha and Lagos.
This could lead to increase in sales by offering products to customers who have not previously had the chance to purchase them.
You need to consider possible regional differences in customer preferences, language, and legal requirements that may necessitate a slight change in the product or packaging.
New demographic market:
Demographic market is used to characterize potential customers based on their income, age, gender, education, etc.
Your company may currently be selling its existing products to a specific demographic group but your company can grow by offering the same product to different demographic groups.
For instance, a fashion and designing firm currently specialized in making only male suits may also target female suits for high class ladies with high disposable income.
New product use:
You may find out that people use your product in a way that is not intended or expected.
This new knowledge of product use provides insight into how the product may be valuable to a new group of buyers.
Recognizing this new product use could open up a whole new market for you.
Knowledge of this new use could also enable you to modify your product slightly if the need arises to better satisfy customers who use the product in this way.
Market penetration strategy has the advantage of capitalizing on existing knowledge and expertise in a particular technology and production process.
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Courtesy: Focal Success
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