Growing your business is a very important matter. However, it seems that companies during the times of the covid-19 virus lockdown are only focusing on strategies to survive and to minimize the damage.
But I think that for the open-minded business owners and entrepreneurs, this is the perfect time to think about growing your business.
After all, growth “is crucial to the long-term survival of a business,” notes nibusinessinfo.co.uk, pointing to these clear-cut benefits:
- Easier to add resources
- Locate and identify new sales opportunities
- Expand range of products or services
- Acquire new customers
So, surprise everyone and start growing your business like never before. Who knows if the opportunity will presents itself again…
The Growth Strategies
Growing your business in existing product markets
Here you can grow your business in the market to you already know.
Increase market share
Apart from potentially getting more revenue, offers a high market share the following advantages:
- A greater competitive advantage – that will allow you to produce goods or services more cheaply and with more profit than your competitors.
- You can bargain better prices from suppliers – a high market share usually means more sales, and, if you are trading products, more inventory. Most suppliers of inventory give price discounts if you buy larger quantities.
- Economies of scale – economies of scale refer to the reduction in the per unit costs of products due to an increase in the total output of the products (Value Walk). So, manufacturing companies with a high market share can easily enjoy scale advantages.
How to increase your market share according to Stewart Swayze:
- Take market share from a competitor – by spotting the trends in the market sooner than your competitors. Also, to listen better to the customers and be more flexible than the market leaders.
- Convince inactive prospects in the market to purchase your product or service – by talking about what they are interested in hearing.
- Acquire a competitor – if you have the capital, know-how and operational capacity, you can buy-out the business of one of your competitors in the market.
Short-term solutions to increase your business’s market share can be by spending more on advertising, promotions, or price reductions. However, although you may get more people to buy your products, they will stop doing so when your promotions come to an end.
Increase product usage
Getting your existing customers to use more of your products will not prompt your competitors to react dramatically. Indeed, your competitors will probably not even notice it.
So, how can you get your customers to use more of your products?
- Increase the frequency that it is used (Magestore)
- Send a newsletter email to your customer with the latest product news and promotions
- Introduce a loyalty program for frequent buyers
- Increase the quantity that is used
- Make sure the buyers know what the benefits are when using your product
- Rethink your marketing strategy
- Find new applications for current users
- Research consumer trends and changes in behavior
- Involve your employees to brainstorm a solution
Introducing new products or services is another way to grow your business. In fact, new product development is often considered to be the cornerstone for building any successful business. Without it, businesses tend to stagnate, then eventually decline, suggests the Edward Lowe Foundation.
Product development can be done in many ways.
- Add product features or refine products – that is to improve your existing products or to make it more useful for the users.
- Develop a new generation product – these products can make existing products absolute and as such can result in more sales.
- Develop new products for the same markets – the new products should complement the existing ones. For example, a mobile phone manufacturer also sells cordless battery chargers in the market for mobile phones…
Growing your business by Market development
Do your existing business in new markets. Here you aim will be to sell your products or services to brand new customers.
- Expand geographically – geographic expansion may involve changing from a regional operation to national or international operations. More likely nowadays geographic expansion of your business will be to expand your business via the online channel.
- Target new segments – this is especially important if you want to sell your product online. You should identify the niche users of your product and grow and develop that niche using digital marketing tools.
Diversification (new products and markets)
Diversification is the strategy of entering product markets different from those in which a firm is currently engaged.
- Related diversification – occurs when the company adds to or expands its existing line of production or markets.
- Unrelated diversification – when the business adds new or unrelated product lines and penetrates new markets. For example, if the shoe maker enters the business of making clothes.
Vertical integration is when a company controls the supply chain, from manufacturing to end sales.
- Forward integration – is when a manufacturer decides to perform distribution and/or retail functions within the distribution channel.
- Backward integration – is when a company buys another company that supplies the products or services needed for production.
You know what? Maybe the time is right to grow your business, but is your company ready?
A good starting point is to see that the organizational culture of your company is in order.
- Is it an autocratic ‘power’ culture? If so, growing your business won’t work. Because everyone will be too afraid to give their opinion or too afraid to make a mistake – don’t even try it.
- Or a ‘rule’ culture? Also, not ideal – too much red tape and too long lines of authority.
- What about a ‘people’ culture? Shame, growth strategies won’t get off the ground – because all the employees’ feelings must first be considered.
- A dominant ‘achieve, organizational culture is the best to grow your business. Everyone is empowered and skilled to focus on achieving the end result – to grow the business…
The matter of growing your business is almost the same a starting your business. However, when growing your business, it touches more people, and the stakes are therefore much higher.
Aaker, David A. 1998. Strategic market management, John Wiley & Sons. New York. US. 5. ed.