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Strategies for business growth

You don’t need to be a billion-dollar global brand to muscle market share away from your competitors. What you need is an unstoppable business growth strategy.

Of course, with growth comes risk. So, truly successful businesses rarely rely on a single plan of action. Instead, they combine multiple growth strategies to win, including market development, disruption, product expansion, channel expansion, strategic partnerships, acquisitions, and organic growth.

Before you started your small business, you probably did market research to make sure there was enough of a need to bring your idea to life. As you think about growing, it’s not a bad idea to continue your research and see what has changed in your market.

One growth strategy you can use is market development. This approach uses market segmentation to find potential customers within your existing market. It’s meant to help you tap into a new segment with your existing offerings, or lead to product development to reach a new type of customer.

Market Penetration Strategy

One business growth strategies is market penetration. A small company uses a market penetration strategy when it decides to market existing products within the same market it has been using. The only way to grow using existing products and markets is to increase market share, according to small business experts. Market share is the percent of unit and dollar sales a company holds within a certain market vs. all other competitors.

One way to increase market share is by lowering prices. For example, in markets where there is little differentiation among products, a lower price may help a company increase its share of the market.

Market Expansion or Development

A market expansion growth strategy, often called market development, entails selling current products in a new market. There are several reasons why a company may consider a market expansion strategy. First, the competition may be such that there is no room for growth within the current market. If a business does not find new markets for its products, it cannot increase sales or profits.

A small company may also use a market expansion strategy if it finds new uses for its product. For example, a small soap distributor that sells to retail stores may discover that factory workers also use its product.

Product Expansion Strategy

A small company may also expand its product line or add new features to increase its sales and profits. When small companies employ a product expansion strategy, also known as product development, they continue selling within the existing market. A product expansion growth strategy often works well when technology starts to change. A small company may also be forced to add new products as older ones become outmoded.

Growth Through Diversification 

Growth strategies in business also include diversification, where a small company will sell new products to new markets. This type of strategy can be very risky. A small company will need to plan carefully when using a diversification growth strategy. Marketing research is essential because a company will need to determine if consumers in the new market will potentially like the new products.

Acquisition of Other Companies

Growth strategies in business can also include an acquisition. In acquisition, a company purchases another company to expand its operations. A small company may use this type of strategy to expand its product line and enter new markets. An acquisition growth strategy can be risky, but not as risky as a diversification strategy.

One reason is that the products and market are already established. A company must know exactly what it wants to achieve when using an acquisition strategy, mainly because of the significant investment required to implement it.

Market segmentation

Another small business growth strategies is market segmentation. This simply means dividing your market into various groups (segments) according to customer preferences, interests, locations, and other characteristics. These segments allow you to create targeted campaigns according to specific variables, giving the campaigns a much higher chance of success. Typical segments are:

  • Geographic
  • Demographic
  • Firmographic
  • Behavioural
  • Psychographic

Segmentation is a strategy typically employed by businesses such as cosmetics suppliers, banks, clothing companies, and media outlets. If your product or service range is in any way diverse, you can surely benefit from market segmentation.

Note that it will involve thorough research in order to efficiently profile your customers and tailor content accordingly. Capturing details through email surveys, purchase history, and site analytics is a good start.

However, given that 65% of marketing managers admit to struggling with the interpretation of data-driven market segmentation solutions, reducing the complexity of this strategy may appeal to you. If so, there is one very convenient method of segmenting your market: a powerful customer relationship management (CRM) tool can optimize your segmentation effortlessly, saving you plenty of precious time and energy.

Alternative channels

Utilising alternative channels is one of the best methods of growth in business. Many small businesses already use more than one online platform for marketing, but sometimes switching platforms achieves better results.

The top three marketing channels are email marketing, social media, and business websites. 54% of small businesses use email and 48% use social media; it might be surprising to know that less than two-thirds (equating to 64%) of small businesses have their own website, according to B2B research firm Clutch. co – yet customers tend to expect to find a website for informational purposes at the very least!

For exclusively offline businesses, it may be time to launch a website with an online product store to gain national or international reach. Trends in recent years show that having both an offline and online presence leads to optimum growth, so it is worth considering.

Small businesses with quality products usually benefit from using alternative channels. Five commonly used channels are Google Ads (pay-per-click/cost-per-click advertising), Facebook email marketing, and remarketing. To give you an idea, remarketing is email-based and relates to the collection of user information for list creation; the lists are then used for future promotional emails.

Conclusion

To succeed in today’s marketplace, businesses need to continue the discovery process, harnessing new strategies and advancements in technology. They need to grasp the fundamental principles that allow companies to make a leap and stay successful in the face of competition.

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