Most businesses start small and stay small. In this day and age if small isn’t enough and you want to make it to the next level, a growth strategy is imperative. You’ll have to account for intensive growth for the transition and then integrative growth for after your boom and diversification for beyond.
Intensive Growth Strategies
For starters, it is best to put together a growth strategy starting with the actions that bring the least amount of risk with the most results. As you keep growing, the riskier the opportunities get along with the greater results but also greater risk. The intensive growth strategies entail the following:
Market Penetration is the least risky growth strategy. The focus is to sell more of the current product to current customers. Most consumer goods products go this route selling bigger packages of product.
Market development comes next and would mean selling more of your current product to an adjacent market. This can be executed by expanding your reach to more cities or states.
Alternative channels means reaching your customers in new and different ways than before. You can offer product online or in physical stores.
Product development is the most traditional growth strategy. The goal is to develop new products for your existing customers. This mitigates risk as you are selling to people you already know you as you know them.
New Products for New Customers
Sometimes, you’ve exhausted your existing customer base and have to create new products for new customers. This can happen if the market changes or shifts forcing you to adjust. This phenomenon can also take place when you create something new that appeals to a new market bringing them into your sphere allowing you to build for them.
Integrative Growth Strategies
Once you’ve gone through Intensive Growth strategies you can move towards Integrative Growth Strategies. These are made up of:
Horizontal growth would mean buying a competing business adding not only to your company’s growth, but also eliminating a future barrier to growth.
Backward growth would mean buying one of your suppliers so you totally control your supply chain. This could also decrease your ultimate cost and production time for new products.
Forward growth would focus on buying out companies within your distribution chain.
Lastly, you can explore diversification. Diversification would mean growing your company by buying another completely unrelated company or product line. This is highly risky, but in successful cases can prove to expand business enormously.
Overall, growth is an active and dynamic process, you must be willing and available to adjust and change as the market and environment changes. Its best to plan and execute strategies one rung at a time.