How To Develop a Growth Strategy (Includes Examples)

Mailchimp CEO and co-founder Ben Chestnut has frequently told the story of an all-hands meeting with his team in 2014. People were raising their hands and asking, “So what’s the strategy?” Chestnut brushed it off, replying, “We don’t need no stinkin’ strategy—we’ve got this!” The employees of Mailchimp were not impressed with this cavalier approach. Chestnut reflected on this reaction after the meeting and realized the company actually needed a growth strategy—some type of plan or goal. And the rest is history. If you’re sitting over there like Chestnut back in 2014, tasked with designing an overall strategy for growth, the examples below should get the wheels turning. Just remember: For a growth strategy to be effective, you need to align the entire organization around the plan. We’re talkin’ engineering, marketing, leadership, design, product management, etc. From there, you can determine your tactics and analyze those efforts to make informed decisions about “what comes next.”

Mailchimp CEO and co-founder Ben Chestnut has frequently told the story of an all-hands meeting with his team in 2014. People were raising their hands and asking, “So what’s the strategy?” Chestnut brushed it off, replying, “We don’t need no stinkin’ strategy—we’ve got this!” The employees of Mailchimp were not impressed with this cavalier approach. Chestnut reflected on this reaction after the meeting and realized the company actually needed a growth strategy—some type of plan or goal. And the rest is history. If you’re sitting over there like Chestnut back in 2014, tasked with designing an overall strategy for growth, the examples below should get the wheels turning. Just remember: For a growth strategy to be effective, you need to align the entire organization around the plan. We’re talkin’ engineering, marketing, leadership, design, product management, etc. From there, you can determine your tactics and analyze those efforts to make informed decisions about “what comes next.”

A growth strategy is an organization’s plan for overcoming current and future challenges to realize its goals for expansion. Examples of growth strategy goals include increasing market share and revenue, acquiring assets, and improving the organization’s products or services.

How to Develop a Growth Strategy: Choosing One That Works (Growth Strategy Part 3/4)

How to create a growth strategy

Here are the steps you can take to create an effective growth strategy for your business:

1. Identify your value proposition

The first step when creating a growth strategy is to identify what makes you different from the competition. Consider why your customers come to you when they need a product or service like the one you offer. Ask yourself what differentiates you from your competitors and what makes you relevant. Use your answer to these questions to identify why potential customers should choose your business.

2. Identify your target audience

In order to understand how you want to grow, you first need to understand who you currently serve. Start by looking at your current customer base. Ask yourself which of your customers do the most business with you or are of the greatest value to your company and what their distinguishing characteristics are.

3. Understand your current revenue streams

The next step is to identify all of your current streams of revenue. Consider whether there are other revenue streams you could add that could make your company more profitable. Consider whether these additional revenue streams are sustainable. Also, take note of whether there are products or ideas you have that dont actually have revenue streams.

4. Look at your competition

Look at companies that are in direct competition with you as well as similar businesses that are growing in unique ways. Consider why those businesses made the choices that they did and whether those businesses are uniquely positioned. Ask yourself what changes your business could make that could position you to increase your market share.

5. Choose an area of growth

In order to grow, you need to understand where you want to grow. Some of the most common growth initiatives include:

6. Conduct market research

After youve selected how you want to grow your business, you need to perform market research to confirm that your strategy is feasible. You may want to consider conducting surveys or examining existing research in your industry. The facts you uncover during this stage of the process can help you determine your budget for the growth strategy, your timeline and the ultimate goal.

7. Set goals

Once youve confirmed what aspect of the business youre growing, the next step is to determine how much you plan to grow. The goals you set should be based upon what you want your business to become. However, its also important to ensure your goals are realistic and achievable, which is why the market research step is particularly important.

8. Create a plan

The next step is to develop a detailed growth strategy. Your plan should include a detailed list of action items that your team needs to complete, who will be responsible for each action item and the deadlines for when each task needs to be accomplished. You should also include a list of resources that you will need to attain your goal for growth.

9. Consider investing in more employees

Depending on the size of your current team and what your ultimate growth objective is, you may need to hire new employees. Because many of your employees likely come into direct contact with your customers, its important to hire talented individuals who are motivated by your organizations value proposition, as they will usually work harder and feel more invested in the business.

10. Determine requirements for growth

The final step before you take action on your growth strategy is to determine whether there are specific resources that will make it easier for you to meet your goals for growth. Some examples of growth tools include:

What is a growth strategy?

A growth strategy is a strategic plan that businesses use to increase sales for their products and services, thereby increasing their market share. Growth strategies allow businesses to overcome challenges and can be achieved by expanding a product line, adding locations or investing in customer acquisition.

Examples of 4 growth strategies

Here are four strategies for business growth and examples of each:

With this strategy, a company aims to increase its market share by either lowering prices or attracting new customers.

Example: A major department store has a big sale for Mother’s Day to attract a new customer who is shopping for a gift for their mother.

2. Market expansion

Example: A white vinegar manufacturer advertises that its product has multiple uses, such as a household cleaner that can be used in the dishwasher and washing machine.

Another common growth strategy is product development, where a business expands its line of products and services and continues to sell within the same market.

Example: A soda company offers both a diet version and a caffeine-free version of its product to appeal to a wider audience.

With this growth strategy, a company begins selling new products and services to a new market. This type of strategy involves a greater amount of risk, as the company doesnt know definitively how a brand-new product will sell in a new market.

Example: A clothing designer diversifies their product line by creating and selling a new designer perfume.

FAQ

What are the 4 growth strategies?

5 Steps to Creating a Growth Strategy that Actually Works
  1. Set your high-level goals.
  2. Identify your inputs and outputs.
  3. Run growth experiments.
  4. Validate your growth experiments.
  5. Foster extreme accountability.

What are three main types of growth strategies?

Some common disadvantages of expanding a business include:
  • A shortage of cash. You may need to borrow money to buy new premises or equipment to expand.
  • Increased capital requirements. …
  • Loss of control. …
  • Compromised productivity and quality due to lack of resources.

What is growth strategy with example?

Growth Strategies – Definition, Types & Examples
  1. Go for a Growth Strategy Template.
  2. Choose Your Growth Area.
  3. Know Your Competitors.
  4. Plan Your Action.
  5. Execute Your Plan.

What is growth strategy in business plan?

The four growth strategies
  • Market penetration. The aim of this strategy is to increase sales of existing products or services on existing markets, and thus to increase your market share. …
  • Market development. …
  • Product development. …
  • Diversification.

Related Posts

Leave a Reply

Your email address will not be published.