It is often answered fact that business means growth. Every company seeks growth in one way or the other. Each business has a unique strategy for implementing growth by raising sales and profits. The business’s marketing strategy will be influenced by its financial standing in the market, the level of competition, and, to a large extent, governmental regulations.
Webinar: The 3 Types of Business Growth
14 types of business growth strategies
The main strategies that companies can employ to increase their market share, revenues, and internal operations are as follows:
Market penetration
When a company tries to drive additional growth within its current market, that is when market penetration happens. To achieve this, they might try lowering prices or stepping up marketing initiatives to increase market share. Increasing brand recognition can be an efficient way to carry out this plan.
Product development
Businesses may opt for a growth strategy that involves developing new products or innovating existing ones in order to boost sales. To draw in more customers, some businesses decide to take their current inventory and add new features. One way businesses encourage growth is by spending money on the design and development of new products.
Market expansion
The market expansion strategy involves a company trying to grow in its current market by contacting untapped customer bases. Instead of selling only to corporate office clients, an office supply company might try to increase its market share by selling to government agencies, healthcare providers, and educational institutions.
Vertical integration
Businesses that choose to expand through vertical integration strategies assume responsibility for a different step in the manufacturing or distribution process. This could entail a business starting to manufacture its own packaging materials or purchasing a factory that manufactures a crucial component for a product.
Productivity and efficiency
Some businesses grow by changing their processes to increase productivity. Efficient production methods can help cut costs and increase revenue. An organization may decide to audit its production chain, including its manufacturing and distribution processes.
New geographies
Businesses can also use marketing expenditures as a growth strategy by expanding to new markets. Extension of product offerings and distribution on a regional, national, or even global scale can be interpreted as this. If distribution is properly managed, offering products outside of a current geographic area can create new revenue streams.
Share of wallet
Companies can start growing by increasing sales to current customers by concentrating on customer retention and high-quality service. Generally speaking, selling to existing customers is less expensive than other forms of marketing. For businesses with excellent customer service procedures and a strong customer base, this strategy may be successful.
Diversification
Businesses that opt for diversification develop new products for an entirely new market. This kind of expansion might entail the company entering foreign markets or regions where it has no prior sales history. Some businesses do this by seeking out opportunities for extensive expansion in an effort to increase their market share. Through a variety of product offerings, diversified businesses may have a stake in several industries.
Acquisitions
Companies may implement a growth strategy by buying another business. A business might acquire the assets of a rival in order to absorb their market share. The parent company’s sales and revenue will then increase. Because a company is essentially buying into a market with this strategy, growth is encouraged more quickly than if organic growth methods were used.
New channels
Another way for companies to grow is by distributing their products through new channels. For instance, a business that had only ever operated online might decide to start selling its products in physical stores. Another option for a business is to sell to consumers as opposed to just other businesses.
New business models
Changes in business practices may have an impact on a company’s rate of expansion. A company can use other tactics to expand its growth opportunities when it decides to make operational changes.
Investment
Owning shares and making investments in other businesses could help to increase business growth. A company has the chance to gain advantages as a stakeholder when it uses its revenue to increase the assets of another company. This may include dividends, stock options or other investment earnings.
Market segmentation
Businesses frequently find growth opportunities by concentrating on a specific industry subsegment and expanding there. In markets where big businesses already control a significant portion of the market share, small businesses can profit from this strategy.
Business partnerships
By combining the strengths of two or more brands, strategic partnerships can accelerate business growth. As part of this strategy, companies frequently draft a contract that clearly spells out the terms of the arrangement for the parties. Gaining the interest of another consumer group benefits businesses from various industries or markets.
What is business growth?
When business owners, employees, and external factors contribute to a company’s success, business growth happens. When a company adds more clients, generates more revenue, or produces more product, it is said to be growing.
Most businesses strive for growth, which drives numerous decisions that have an impact on how those businesses operate on a daily basis both internally and externally. Consumer trends, market opportunities, and managerial choices all have an impact on how a business grows.
Planning and focused efforts that fall under the following main categories are necessary for business growth:
Tips for helping your business grow
Here are some ideas to help expand your business:
FAQ
What are the 4 types of business growth?
Organic, strategic, internal, and lastly, acquisition, merger, or partnership are the four types of business growth. Product development, market expansion, diversification, and market penetration are among the four strategies.
What are the two main types of business growth?
Businesses can expand in one of two ways: either organically (internally), also known as internal growth, or externally, also known as integrated growth.
What are examples of business growth?
- Market development (market penetration) …
- Market disruption. …
- Product expansion or diversification. …
- New channels. …
- Strategic partnerships. …
- Acquisitions. …
- Organic growth.
What are the four types of growth?
- Market penetration. This strategy’s goal is to boost sales of currently available goods or services on current markets, which will increase your market share.
- Market development. …
- Product development. …
- Diversification.
