Companies are on a constant pursuit of growing the business through increase in sales and profit.
As proven by many successful companies, growth has always been backed up with strategies and a practical execution plan. However, choosing a strategy is way more complex than picking a goal and planning a roadmap. An appropriate strategy is relative to the business’ current conditions such as financial status, competition, product quality, and even government laws and regulation of the location it is in.
Take a look at the common growth strategies that businesses use when targeting growth.
Market Penetration Strategy
Market Penetration involves selling a company’s existing products/services to an existing market in order to gain a higher market share. It is implemented by many companies as it has the lowest risk among the other common growth strategies to pursue.
For example, you have identified your main target audience as Female between age range 22-36. This strategy means you’ll attempt to sell your current products more to the same group.
There are four approaches under this strategy, and they include:
- Retain or increase your product’s market share
- Dominate growth markets
- Drive out competitors
- Increase existing customer usage
Market Expansion Strategy
Market expansion strategy entails selling the existing or current products/services that a company has to a new market and a new target audience.
This is usually pursued by companies who (1) no longer have room for higher sales in the current market it is in, given that it has exhausted all its marketing mean; or (2) when a company finds out through observation or research that there is a new target audience who can be a good group of consumers.
Product Expansion Strategy (also known as Product Development)
This strategy means adding more new products to the existing ones and creating a variety of new offerings to sell to the current market/s that a brand is having. It can also be developing, updating or recreating the current products to offer something new.
In comparison to Market Expansion, this strategy focuses on improving what is existing and adding more to sell more to the current target market.
This strategy combines both ‘Market Expansion’ and ‘Product Expansion’ strategies. It means that a company is deciding to create a new product/service and offering it to a new market.
This is rather a risky strategy which requires an extensive research and testing to determine if the consumers in this new market will purchase the new products.
This strategy means acquiring a new company of similar product line and market. This is used for a business to have more products to offer and more markets to reach. It is not as risky as the ‘Diversification Strategy’ since in this case, the products and market relationship of the brand have already been established. Nonetheless, a company must have clear goals and action plan in using this strategy given the investments it entails.
Contrary to what many leaders think that there is a silver bullet in successfully growing a company, achieving goals is more of a collective result of an efficient and practical strategy, consistent execution, and proper management. Know more about these key steps in knowing and executing the right growth strategy for your business. You can get in touch with us for a complimentary assessment by our experienced strategy consultants. Click here.