COVID 19 has certainly put a beating on many firms.
Our ability to be flexible to change and the need to adapt to consumers changing needs has become pretty evident.
As the CEO of a large organisation or a newbie entrepreneur, you should be in a constant mind-set of developing and evaluating a growth strategy for your business every few years.
There are many reasons to pursue business growth. With upward movements comes greater brand recognition, increased sales and greater market stability.
So what's a growth strategy?
A growth strategy is a long term approach in business that aims specifically at increasing an organisation's market share.
Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition.
For young start ups, these traditional methods of pursuing growth may need to be modified as technology and competition has changed the landscape that we operate in.
So let's breakdown each of the growth strategies above and look at how they can be applicable to your own business.
1. Market Penetration
This is a growth strategy for businesses that have been in operation a while or a large company who may have seen its sales plateau. This strategy involves selling more of your products and services within your existing clientele or within that customer profile. This may sound tricky to many entrepreneurs as one might say "Well how can I get people to buy more from me? ".
Starbucks is a classic example of effective market penetration. Starbucks already has presence in more than 78 countries and territories. To maximize revenues and growth in these current markets, the company applies market penetration by opening more company-owned stores or licensed/franchised café locations.They also change their food menu on occasion to appeal to their loyal customer base.
I spoke to a women's boutique owner just a few weeks ago and encouraged her to look at this strategy as well. Price adjustments, increased promotion and new channels of distribution can assist in ensuring this strategy is successful for your business.
Let's take for example that you are a jeweler and you make one of a kind pieces. To get more of your product in the hands of the clients that are likely to buy it will mean you need to be more accessible to these customers. As a business owner, you should therefore set a target to get your jewellery pieces positioned in more retail stores. Simply make a list of the jewellery stores that you like and that you feel support and represent your brand and reach out to them to get your products featured in their stores. Offer some after sales support such as regular visits to their stores or an offer to speak to potential customers at their locations. This can go a long way to building your brand and growing sales.
2. Market Expansion
In marketing and business theory this is also known as market development. This involves selling your existing products in a new market. As distinct from market penetration, the concept here is to find completely new customers who will buy your product. This strategy will take some research initially to determine how your product will satisfy a different clientele and will also involve you developing a new customer profile for this group (market segmentation).
Many businesses also attempt to pursue this strategy when competition is great. In Trinidad, the food , retail clothing and beauty industries are fairly saturated, and as a result, owners need to look for new customers for their survival. I noticed a clever example of this right here in Trinidad and Tobago where a very popular local make up artist has been selling her make up course regionally prior to COVID 19, has now digitized her courses during this pandemic and has expanded her brand and business in this way without missing a beat. She has been able to service a whole new clientele all the while growing her credibility and visibility.
3. Product Expansion or Product Development
Product expansion also known as product development looks at modifying existing products, adding new products or extending the existing product line of your business and offering this to your existing customer base. For service based organisations this may take the form of improved levels of customer service or improved delivery times.
A business coach showed me how to sell my own services in tiers just a few years ago. As you go up each tier the value offered increases and will cater to each client's specific needs and budget.
A good product example of this locally is Hand Arnold's Moo milk. When this brand was originally introduced to us a few years ago, we knew it simply for its full cream and low fat milks. Now the Moo brand has extended to evaporated milk, condensed milk and chocolate milk.
The final two growth strategies - diversification and acquisition are more suitable for medium to larger firms that have the financial capacities to invest in these areas. These growth strategies are perhaps the riskiest, and do require a desirable amount of research before diving head on.
All in all, if you want to remain and compete in business successfully, it is important to identify one or two growth strategies and develop a plan to make things happen.
For most business owners today, in order to see any kind of increases in revenue setting growth as a company objective is crucial. By developing strategies that are focusedon growth, companies can increase their market share and improve brand awareness, which should all translate to greater profits.
Does your company need help with business growth?
Then call us today to get started and to find out more about growth strategies and how it can be used.
ABOUT THE AUTHOR:
The Stammering Communicator
Debbie-Ann Jollie is a Marketing Strategist with more than 10 years experience creating marketing strategies and promotional campaigns for a diverse group of corporate clients and first-time entrepreneurs. In her not so spare time she likes writing blogs for her boutique while sipping on Jack Daniel's honey ('cause vodka gives her a headache) and taking naps on Sundays.
