Business Growth Strategies Definition
Strategy that is intended to win a larger market share is termed as business growth strategy. These growth strategies usually answer three questions that are as follows:
- What is the target market of the business? Target market is determined according to psychographic and demographics of customer segments.
- Which product will you deliver to your segment of the market? Detailed set of activities to design, create and deliver the products to the market segment.
- What development channels will be adopted in order to find, acquire and grow the customers? Customer development is all about development, creation and delivery of the products to each and every touch point where your target market may reach, perceive and try your products and services.
These are the core questions, answering which businesses end up in successful Business growth strategies. In case the business has multiple growth strategies, each strategy must respond to all of the above mentioned dimensions.
Types of Business Growth Strategies
There are various strategies for business growth. Different businesses at different stages adopt different strategies or a combination strategies to meet the objective of the business growth. Five types of growth strategies for business are as follows:
- Market Expansion Strategy
- Product Diversification Strategy
- Market Opportunity Analysis
- Competitive Market Analysis
- Market Segmentation Strategy
Market Expansion Strategy
Market expansion strategy is one of the most common strategies for business growth. Under this strategy, the businesses take the risk of moving into a new direction. Businesses adopt the expansion strategy in following manners:
- Expansion through concentration: This includes the resource involvement in developing the product. Businesses try to focus on the existing markets with the help of market penetration strategies.
- Expansion through integration: The businesses move up or down in order to meet the customer demands integration of the adjacent activities.
- Expansion through co-operation: It is done through takeovers, strategic alliances, mergers and joint ventures.
Product Diversification Strategy
Diversification strategy is adopted by the businesses to boost up their sales and revenue through introduction of new products. There are three diversification strategies that are as follows:
- Related or concentric diversification: This kind of diversification is where the products and services are closely related to each other. For example, sales of appliances, after sales warranty and services.
- Horizontal diversification: It is to add new products or services for the existing customers. For instance, a book seller adds coffee service on the store.
- Unrelated or conglomerate diversification: The products and services offered under this strategy do not have any relationship with one another. For example a fertilizer company starts offering dairy products too.