A business needs a growth strategy to keep up with competitors and retain it’s existing customers. A study by Berkeley & Stanford faculty members that analysed 3,200 high growth internet start-ups revealed that only 8% of the startups succeeded within 3 years. 74% of those who failed cited premature scaling as the reason for their failure. Clearly, choosing and crafting a growth strategy while planning to scale up is a requisite.
Here are 4 growth strategies to implement in order to gain traction in the marketplace:
1. MARKET DEVELOPMENT
Finding new channels of growth
When drafting a growth strategy, the major driver of a business’s revenue i.e. the market is naturally the first thing that one should consider revamping. Market development involves exploring untapped market segments and launching existing products into new markets. This can vary by geography, demographics, technology and many other factors. For example: Coca Cola had launched a line of beverages with zero calories back in the 80’s. Like many of the diet beverages, the prime consumer base was women who were calorie conscious. Hence, young men often shied away from drinking it. In 2005, they revamped the product packaging to give it a more masculine look (one of the masculine features being it’s shiny black can).
2. MARKET PENETRATION
Striking a chord with your customer at a deeper level
Market penetration strategy can be implemented if you are trying to seek more converts from your already existing segment of potential customers. It can involve more aggressive sales and marketing efforts to penetrate deeper into the existing customer base. It aims to increase the market share of your product against your competitors. We are most familiar with it in terms of promotion during occasions and events. For example: Pepsi launches a series of bottles with cricket related graphics on it’s packaging during cricket championships. This strategy helps boost sales during the said festive period/occasion.
3. STRATEGIC ALLIANCES
Carefully calculated relationships towards a better future
Business relationships developed between organizations, businesses or individuals that involve working with each other to achieve a collective goal are strategic alliances. While each company maintains For it’s autonomy, it helps the participants increase their business base and attract more clients. example: Nike does not produce a single shoe. It has created strategic alliances with it’s suppliers. OYO rooms partnered with OLA allowing commuters to book OYO’s hotel rooms through the OLA app while travelling on the chosen route.
4. MERGERS AND ACQUISITIONS
Allows easy diversification and better financial status
Mergers and acquisitions are most often considered when the objective is diversification (for example- a broader product offering). This way a firm doesn’t have all share of the merged company. An acquisition happens when a financially stronger firm buys out a target firm and the target firm ceases to exist and becomes a part of the firm. Mergers and acquisitions are most often considered when the objective is diversification (for example- a broader product offering). This way a firm doesn’t have all it’s eggs in one basket. This also minimizes a lot of the risk involved as a lot of preexisting resources and products exist already in the sector where the company wants to expand. In addition, they lead to better financial health and economies of scale leading to lower cost of operation.
These strategies definitely require a great deal analyzing multiple metrics, planning and careful execution. Although growing to the level of big league companies is not easy, it can definitely be simplified. Documenting a growth strategy with the right amount of time and investment is essential. Seeking consultation from experts to help you build a comprehensive and flexible plan is imperative. A well-planned strategy always pays off in the end!of