Knowing the key strategies for business growth is incredibly valuable. These strategies are helpful for planning growth in an innovative, sustainable way.
Why Choose a Growth Strategy?
Some believe that growth simply means more of what they currently do. However, nearly every product, business model, and economy are more diverse and complex than just doing more of the same. Instead, strategic growth comes from identifying specific gaps or opportunities and developing a plan to pursue them.
Businesses use this laser-focused approach to set themselves up for success by conducting thorough market research and an honest self-assessment. However, before you pursue growth, you should ask yourself if it is the right time.
When to Grow
When You Can Handle It
Growth isn’t necessarily a perennial pursuit. There are occasions when broken systems or processes create obstacles to fulfilling orders. If there are bottlenecks in the operations, growing too quickly may back up orders or deliver a product that isn’t up to the company standards. Before you decide it’s the right time to grow, ensure that you have the people, systems, and resources, or ability to gain them quickly, to sustain that growth.
When Stakeholders Demand It
Stakeholders such as clients or investors may demand growth. In the case of investors, that may be more revenue, but for clients, it may mean offering a new product, better services, or expanding into a new market.
When There Is Opportunity/Change in the Market
It may be time to grow when a competitor exits the market, and you can obtain their abandoned client base. Perhaps market demand has shifted to a different product.
For example, when the COVID-19 pandemic began, people were forced to stay at home and gyms closed. However, still wanting a class-like fitness experience, the company Peloton offered the perfect solution. The product was a stationary bike with an attached tablet that offered the fitness class experience at home. The company had to act fast and create new partnerships quickly to meet the boom in new demand.
Where to Grow
There are four primary areas of business growth:
- Market Penetration
- Market Development
- Product Development
Market penetration means gaining more share of the market you are in currently. If a competitor has just exited or suffered a hit to their reputation, you are poised to launch a market penetration strategy to gain market share from them. This strategy is also useful if you have a new technology you employ to offer a better or more affordable solution than competitors.
For example, Amazon.com became a massive online retailer by offering less than expensive products (even taking a loss to win market share) and more convenient (offering fast shipping at no extra cost).
Market development is the strategy of taking your existing products into new markets. This is a common growth strategy with physical product or service-based businesses since they are often limited by geography. New markets may be new geographies or demographics.
For example, Venmo, the peer-to-peer payments platform, started by offering a fast, convenient way to pay someone digitally. While their early use cases may have been for craigslist.com purchases or reimbursement for happy hour drinks, they expanded into serving small businesses. They made their service available for small businesses to accept digital payments from customers.
Product development means creating a new solution for your existing market. If you have a loyal fanbase and recognizable brand, this strategy is advantageous. One method of deciding what products to develop is to identify what third-party products your audience currently uses to support your primary products.
For example, Apple began by creating a home computer that was better and easier to use for the average consumer. They expanded into other electronic devices that support and complement their computers. This created an ecosystem that retains customers.
Diversification combines product and market development. This strategy focuses on delivering a new product to a new market. This route has the potential to expand the business greatly but also a significant potential for failure. Rather than develop their own product in-house, many companies will acquire other companies as a way of quickly breaking into a market and product set. Companies may choose this method to diversify their product portfolio to hedge against market shifts or bridge their current product set with a currently unrelated one.
For example, Facebook is primarily a social media company, but they have ventured outside the realm of social media before. In 2014, FB acquired Oculus, a virtual reality gaming device company. This acquisition brought them into the gaming and virtual reality industry and was an eventual springboard to their eventual Meta rebranding and work in the virtual space.
How to Grow
Developing a key strategy for business growth includes several steps and many questions. Answering these questions will help you make vital decisions as you build your plan.
Are you expanding into a new market or gaining more market share? If you are entering a new market, you’ll need to learn who the new audience is. If you’re gaining more market share or developing a new product, you’ll need to understand what this audience is looking for in a solution.
- Who are your potential customers?
- What are their buying habits?
- How large is the target market?
- How much are customers willing to pay?
- Who is the competition?
- What are their strengths and weaknesses?
Are your customer interviews going to go broad or deep? Additionally, consider how you’ll interview your audience. You can use phone calls, conduct in-person interviews or focus groups, or send out an online survey. Ask your audience these questions and others you deem necessary.
- What did you like or dislike about the product or service?
- What do you wish was different about the experience?
- What would make it better?
- Why did you choose our company?
- Why was this feature important?
- What questions do you have for me?
Conduct competitor research through open-source intelligence gathering such as foot traffic count, Facebook ads, social media accounts, and search engines, and any industry sources you may already know. Answer the following questions in your research.
- Is there a prominent industry leader or many small competitors?
- What are the competitor’s strengths and weaknesses?
- What are their partnerships?
- What are their marketing channels?
- How long have they been in the industry?
- What is the public perception of the industry leader?
Validate your assumptions by surveying the target market and researching the industry leaders’ products and services. Ask the market if your’s is a product they need and how much they would pay for it. Assess this against the price, quality, and breadth of competitors’ product offerings.
- Do your assumptions align with the responses?
- What needs to change?
- Is it still viable?
Whether expanding market share, entering a new market, or launching a new product, develop a plan for engaging with the target audience. Ensure that the content you put in front of audiences is tailored to the platform. Audiences are savvy and won’t be engaged by an ad or piece of organic content that isn’t designed for the platform they’re using.
- Identify marketing channels you currently use.
- Identify channels the audience uses.
- Plan how to engage with them. Digital ads, organic content, email, events, print ads, radio ads, etc.
Put the marketing growth plan into action! Adjust as you go, and make sure to measure as much as you can. Set a timeline to assess how close you are to your business goals and improve as needed.
These are just some ideas for business growth.
What other ideas are there?
Need Help Planning a Strategy for Business Growth?
Planning these strategies can be difficult and time-consuming. Hot Dog Marketing has strategy and marketing teams ready to do the legwork for you. Whatever your business goals are, we use them to inform how we build marketing plans to receive the maximum benefit on your marketing efforts. Learn more about our marketing growth strategy services here.
Interested in getting a strategy for business growth powerpoint? Check out the Slideshare below.
Tom Snyder is a business-minded writer creating compelling content that helps business owners understand the digital side of their business and engage with their audience. Constantly intrigued by learning new things, he is fascinated with tech, business, and sci-fi. In his spare time, you can find Tom building his own business (coffee roasting) or making music.