Every company is launched with a great idea that has high growth potential. Establishing a scalable business is based on turning that great idea into a successful solution. Finding the right strategies for the company is the key to sustainable growth. Expansion strategies are contingent upon the company’s financial situation, competition, and regulations. Before choosing an expansion strategy, evaluate your competitive edge, product offering, customers, and market. Developing a big-picture strategy will also help generate new opportunities, build long term scalable solutions, and deepen customer relationships. From tapping into new markets and customers to innovating new products, growth strategies will enable long-term profitability.
Market Penetration
The least risky growth strategy for any business is to sell more of its current product to its current customers. This strategy is largely practiced in the consumer industry. For example, soda is available in 6, 12, or 24 packages. This popular method of increasing market share is led by lowering prices. In markets where there is little differentiation among products, a lower price may help a company increase its share of the market quickly.
Market Development
This market expansion strategy entails selling current products in a new market. Expanding into different cities and states is a frequent practice in this strategy. When the product or service is expanded into new markets, a wider audience is exposed to the business. Various locations lead to fast growth of profits and diversified audiences.
Alternative Channels
The growth strategy involves pursuing customers in a new way. Moving to online sales from a bricks and mortar store or vice versa is common in channel expansions. Using the Internet as a means for customers to access your products or services in a new way, such as by adopting a rental model or software as a service, are also alternative channel strategies.
Product Development
Product development targets sales to existing customers as well as new ones. With a new product available, existing clientele will already trust it and new customers will be given an innovative solution for their needs. A new product line or enhanced features of a current product gives customers a new product with exciting functions and shows them that the company is adaptable.
New Products for New Customers
The market will often dictate the need for new products to reach new customers. Innovating a new product tailored for a new audience can be a tedious process, which requires research, testing, and improvement. The new products will also expose the new clientele to the existing product line.
Growth Implementation
Choosing the right expansion strategy for your business can lead to long term growth. These strategies are not one size fits all. Identifying the greatest opportunities for the business to flourish will depend on its current state and the company’s goals. You will need to evaluate your business’s market, products, and team needs to determine what strategy is best for you. Once an approach is defined, you can make data-driven decisions and anticipate your company’s future needs. Expansion strategies can result in increased revenue, wider brand recognition, and increased importance in the industry. Growth strategies enable the great idea, which your company was founded on, to become a long term scalable solution.
