GROWTH STRATEGY FOR BUSINESS: Simple 2023 Tips & All You Need

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What Is a Growth Strategy for Business?
Types of Growth Strategy for Business
How To Grow Your Business
Growth Strategy in Marketing
Examples of Growth Strategy for Business
Final Thoughts
Related Articles
References

Your company’s success depends on having a good growth strategy, which is about much more than just advertising. You can’t control the whims of a fickle clientele or the ups and downs of the market without one. This article explains more about growth strategy for business and growth strategy in marketing, and how to go about it.

What Is a Growth Strategy for Business?

The majority of small businesses have ambitions to expand their operations and boost sales and earnings. Companies must apply a certain set of techniques to accomplish a growth strategy, though. The strategy a firm employs to grow is heavily influenced by its financial status, the level of competition, and even governmental regulations. There are many ways for a company to grow. Some of the most common ones are market penetration, market expansion, product expansion, diversification, and acquisition.

Types of Growth Strategy for Business

You may want to know the types of the growth strategy for business. Here they are:

#1. Market Penetration Strategy

Market penetration is one corporate growth technique. When a small business decides to promote current products inside the same market it has been using, it employs a market penetration strategy. Small business experts say that the only way to grow with the same products and markets is to get a bigger share of the market. Market share measures how many units and dollars of sales a company generates in comparison to all of its rivals in a certain market. Lowering pricing is one strategy for gaining more market share.

#2. Market Development

This involves growing sales of existing items or services in previously unknown markets. The market expansion entails analyzing how to expand an existing market or how to sell a company’s current offer in new markets. Different client categories, such as industrial purchasers for an item that was previously marketed only to homes, new areas or regions of the country, and foreign markets, can help achieve this.

#3. Product Expansion Strategy

To boost sales and profitability, a small business may also add new features or broaden its product offering. Small businesses that use product development, also known as product expansion, keep selling into the current market. When technology changes, a product expansion growth strategy frequently succeeds. A small business could also be compelled to launch new products as they replace outdated ones.

#4. Diversification

The business moves into its customers’ or suppliers’ markets. As an example, think about starting to sell paints and other building supplies that your company can use to fix up homes and offices. It is into four parts:

#1. Horizontal Diversification

This entails the business creating or acquiring new products with the intention of marketing them to its current clientele. Current customers might be interested in these new products even if they are frequently technologically or commercially unrelated to current products. For instance, a business that formerly produced notebooks might now introduce a new product into the pen industry.

#2. Vertical Diversification

The business moves into its customers’ or suppliers’ markets. As an illustration, imagine starting to offer paints and other building supplies for use in your company’s home and office renovation work.

#3. Concentric Diversification

Concentric diversification refers to the creation of a new line of goods or services that are similar to an existing product line in terms of both technical and/or financial aspects. Small manufacturers of consumer goods frequently employ this form of diversification, for example, when a bakery begins making pastries or dough products.

#4. Conglomerate Diversification

It means switching to new goods or services that don’t have any commercial or technological ties to the equipment, products, or distribution channels that are now in use but that might be interesting to new client groups. The high return on investment in the new industry is the primary driver of this type of diversification. Large organizations frequently use it when seeking strategies to balance their non-cyclical and cyclical portfolios.

#5. Acquisition of Other Companies

An acquisition is one of the possible business growth techniques. A company acquires another business to broaden its operations. Such a tactic might be employed by a small business to broaden its product offering and penetrate new markets. Risky, but not as risky as a diversification plan, is an acquisition growth strategy.

The fact that the market and products are already established is one factor. Because of the large investment needed to undertake an acquisition plan, a company must be crystal clear about the goals it wants to accomplish.

How To Grow Your Business

It is very important for you to know how to go about growing your business into that big brand you want it to be. Here are ways you can grow your business:

#1. Use a Growth Strategy for Business Template

Don’t launch your growth strategy without first outlining and capturing the steps.

#2. Choose Your Targeted Area of Growth

It’s fantastic that you want to expand your company, but in what specific ways? Focus on a few key development areas in your business growth strategy. Strategic growth efforts frequently have the following objectives:

a rise in the number of employees
expansion of the current workspace for offices, stores, and/or warehouses
adding new offices or branches to your company
expansion into new geographic areas, cities, or nations
including new goods and/or services
expanding the number of places to buy (i.e. selling in new stores or launching an online store)
Increasing sales and/or profits
a larger customer base or a higher pace of new customers

The best growth doesn’t occur in a vacuum, so it’s probable that your growth plan will include more than one of the aforementioned efforts.

#3. Research the Market and Your Sector

You must provide evidence for your desire to advance in this field after deciding what you want to expand (and if growth is even possible). The easiest method to figure out whether your targeted development is both required and possible is to research the situation of your industry.

In order to better set a timetable, budget, and ultimate aim for your project, the knowledge and data you unearth in this step will shape expectations and growth goals for it.

#4. Specify Growth Targets

The next stage is to figure out how much you’ll be growing after figuring out what and why you’re growing. This is why defining a goal based on industry research is so crucial. These goals should be based on your endpoint dreams of where you ideally want your firm to go, but they should also be feasible and realistic.

Take action to define your goals in terms of measurements and a schedule, then. A much more specific goal than “raising sales” is to “increase sales by 30% quarter-over-quarter for the next three years.”

#5. Determine Your Next Steps

Create a thorough growth strategy to describe how you’ll accomplish your next step. We stress again the importance of documenting your growth strategy in order to win over your team’s trust and support.

A list of tasks, deadlines, teams or individuals in charge, and resources should be included in this action plan in order to help you reach your growth objective.

#6. Establish Your Growth Needs and Tools

Determining any criteria your team will require along the process is the last step before putting your plan into action. You can use these particular resources to fulfill your growth objectives more quickly and accurately. Several instances could be:

Funding: In order to complete this project, organizations may need to make a capital investment or allot internal budget funds.

Tools & Software: Take into account what technological resources could be required to hasten the growth process and/or to learn from it.

Services: Expert consultants, designers, or planners in a particular industry may be able to help growth be accomplished more effectively.

#7. Execute Your Strategy

You’re prepared to carry out your company’s growth strategy and provide results for the business now that all of your planning, resource allocation, and goal-setting has been finished.

Make sure you are holding your stakeholders accountable throughout this period, keeping the lines of communication open, and comparing initial outcomes to your expected growth targets to determine whether your projected results are still attainable or whether anything needs to be adjusted.

There are certain general ideas you can use when starting started, but your growth strategy and the strategies you utilize will ultimately be unique to your organization.

Growth Strategy in Marketing

Knowing the growth strategy in marketing is as important as the business itself. In order to achieve its development objectives, a business must devise a growth strategy that addresses both present and foreseeable challenges. Some goals of a growth strategy are to increase market share and revenue, buy assets, and improve the company’s goods and services.

Examples of Growth Strategy for Business

Here are some examples of the growth strategy for business:

#1. Infectious Loops

Not all methods of growth require external resources; some are designed specifically for this. Although they need a boost at first, they ultimately rely heavily (if not entirely) on users’ excitement to keep them going. The viral loop is one tactic that fits that description.

The fundamental idea behind a viral loop is simple:

Someone evaluates your offering.
They are given a worthwhile inducement to spread it around.
They consent and distribute to their network.
New users sign up, take advantage of the incentive, and spread the word to their networks.

In a perfect world, your incentive would be so irresistible that users would actively and joyfully persuade their friends and relatives to join. A viral loop is, at its best, a perpetual acquisition machine that runs around the clock.

However, viral loops are not always successful and have lost some of their potency as they have become more widespread. However, there is still room for growth.

#2. Referrals from Milestones

The viral loop and the milestone referral model both rely on incentives to get started and stay going. However, milestone referrals add a more complex, progressive element to the procedure. Businesses that employ milestone referrals offer prizes for reaching specified benchmarks, while businesses that use viral loops typically offer a flat, continuous offer for each individual referral. “Milestones” are frequently statistics like the number of friends that have been recommended.

This strategy is frequently used by businesses to entice customers to refer friends and family in the quantity necessary to achieve their unique business objectives.

Furthermore, the strategy gives the recommendation process a compelling component. When executed well, milestone referrals are easy to share, have manageable goals, and offer tempting concrete incentives.

#3. Word-of-Mouth

Word-of-mouth marketing is natural and powerful. One of the most potent inducements for customers to buy or try a product or service is a recommendation from friends or family.

Everyone has a psychological bias that contributes to word-of-mouth effectiveness: we unconsciously assume that the majority is correct. The most effective content marketing strategies and sales copywriting depend heavily on social proof. Because of this, companies emphasize the importance of their online reputations.

They know that in today’s customer-driven society, where communication channels are fluid and information is easy to find, one negative blog post or tweet can ruin an entire marketing campaign.

The secret to word-of-mouth marketing is to prioritize a satisfying user experience. You must increase your consumer base’s level of satisfaction and maintain the resulting wave of reliable feedback. With this method, you should focus on giving your users a great experience, and they will help spread the word about you.

#4. Using the “When They Zig, We Zag” Method

A company’s ability to stand out from the competition by providing a distinctive experience occasionally represents the best growth strategy it can use. The business that breaks an industry’s monotony typically gains an advantage.

Let’s say your business created playlist transfer software for use with several music streaming services. Consider that you have a few rivals that all rely on advertisements and paid memberships to make money, both of which irritate users. In that situation, it might be beneficial for you to try to get rid of some of the baggage that users encounter when using the programs of your competitors. If your service is paid, you might want to think about starting with a free trial of an ad-free experience.

#5. Personal Contact

Although it might be some time before this specific strategy can be used again, it is successful enough to merit notice. Including a human aspect in your growth strategy might occasionally assist your company get things moving.

Prospects frequently respond well to a personal approach, and nothing is more personal than direct, in-person interactions. A wonderful method to give your business the traction it needs to take off is to get your hands dirty and interact with potential clients face-to-face. This could entail organizing or supporting events, attending conferences pertinent to your industry, using brand ambassadors, or taking any other steps to proactively and directly interact with your target market in person.

#6. Market Penetration

It is essential for businesses to have competition. Consider the scenario when two businesses serving the same market are competing. Typically, Business B lacks the same kinds of clients that Business A does. This tug-of-war is the foundation for a technique called market penetration.

A product’s market share, or the percentage of an industry’s total sales that are attributed to a single business, rises as it gains traction in the marketplace. Although price reduction and advertising are two expensive but successful strategies to gain market share, they are only a few of the tools available to firms to boost overall sales and keep customers.

#7. Evolution

Market penetration may be replaced with market development if a firm believes it has reached a plateau and that there is no longer potential for expansion in its existing market. Market development tactics direct enterprises to tap into a new market, whereas market penetration concentrates on a company and its current market.

Businesses may opt to produce novel goods or discover a creative application for their undertaking.

#8. Development of Products

Many firms must develop new products or services in order to grow. Product development, which involves creating new products or improving existing ones, enables businesses to draw in new clients and keep hold of their current clientele. An example of this would be online fast-fashion merchants.

#9. Acquisitions

A company’s acquisition strategy can help it grow. Enterprises can grow their operations by entering a new market, developing new products, or purchasing other companies. This growth strategy, one of the more straightforward ones, has substantial advantages for businesses. They enable greater customer access, faster growth, reduced corporate risk, and more.

#10. Growth Partnerships

Growth alliances are corporate partnerships with a strategic goal. They help the concerned parties achieve their growth objectives.

A robust social media presence may be extremely beneficial for marketing and business expansion. Make sure to create brand pages on all social media sites, including Twitter, Facebook, Pinterest, TikTok, and Instagram. Making it simpler for potential customers to find your business through social media might help you enhance engagement with your target audience. It’s also fantastic for word-of-mouth advertising because satisfied clients are likely to spread the word about your content to their contacts.

#12. Natural Growth

The best strategy for business growth, as previously established, is organic expansion. It may take the form of concentrating on SEO, creating interesting content or giving adverts first priority. Organic growth, as opposed to an emphasis on external expansion, is a sustainable approach that encourages long-term success.

#13. Deliver Top-Notch Customer Service

Although it may be tempting to concentrate on attracting new clients, keeping your current clients loyal is equally crucial. Providing exceptional customer service guarantees that you’ll keep your current clients, and there’s a strong possibility you’ll also get some referral business.

Final Thoughts

A company can choose one of these strategies based on the ones it already uses and its goals. This decision is mostly influenced by the market and product strategy of the firm in question and its tolerance for risk.