If your company is a startup or mid-sized company, you, as an entrepreneur, will always look for growing the business as well as elevate the profit percentage and sales for the product. So, each company has to follow specific strategies and techniques to execute this growth in all realms. Various entities are directly related to the strategy and techniques opted by the company's entrepreneur or owner or co-founders. Some of the most common entities that need to tuck are government policies and regulations, market competitors, and the venture's financial strengths. This chapter will learn about some of the standard growth strategies that play a significant role in small-scale business.
Some Popular Intensive Business Growth Strategies
The only means to grow through existing products and its market is by increasing market share. You have to increase the market share by lessening the price. Similarly, other such popular 'intensive' strategies to grow the business are:
- Market Expansion Strategy: This strategy of expanding and growing entails selling your existing products in the fresh market. It is also known as market development. There might be several reasons for opting market expansion strategy. One of them is when there seems to be no room for growth in your existing market.
- Product Expansion Strategy: There might be an option to expand the product line or add fresh and innovative features for amplifying profits and sales. This strategy is also known as product development. It perfectly works when any technology starts to transform.
- Market Penetration Strategy: Startups and small-scale ventures opt market penetration strategy when it agrees to sell any existing market product inside the same marketplace.
- Mergers or Acquisition Strategy: In an acquisition or merger thing, your enterprise had to purchase another venture for expanding its operations, which ultimately helps in expanding its product-line and step into a new market and competition.
- Diversification, i.e., plan-B Strategy: For business growth, diversification is also necessary. A venture had to sell new products to fresh markets, which are quite risky and need to be done carefully.
Questions That You Need During Growth
There are some questions you need to ask as an entrepreneur to yourself and your decision-makers while planning for the growth of the business or your enterprise. These questions are:
- In case the orders, revenues, and sales abruptly become two times or even tripled, could you handle the growth?
- Does your venture have enough workers?
- Do all of your employees know your brand and its value?
- Do you have adequate finances for buying additional equipment, infrastructure, inventory, or hire a new employee, or for making an acquisition?
- Are your clients also planning to grow with you?
Popular Integrative Growth Strategies
There are three viable alternatives if you are not planning to step into intensive growth strategies. These three comes under integrative growth strategies -
- Horizontal Strategy: This kind of strategy for growth involves buying a competing enterprise. This kind of strategy helps in the growth of your venture and eliminates other barriers, i.e., a potential competitor.
- Backward Strategy: In this integrative growth strategy, your company has to better buy one of your suppliers to better control your supply chain. This will help you in developing new products more rapidly and potentially at a much cheaper rate.
- Forward Strategy: There can be a merger or acquisition which can ultimately focus on buying parts of companies which are component of your distribution chain.