Of the many growth strategies that a small business may implement, there are one or two methods they generally use.
If you’re just starting out your business and your competition is minimal, the market penetration approach will work to get more customers on board with what you sell while still having room for expansion at the same time.
Market expansion is trickier but it’s not impossible if done correctly. This works by predicting where demand might come from in order to produce products before the competition does.
Another strategy is product development, which often aims to place the product offerings in a position where they will be most successful.
A company should make sure that its products are being offered at an affordable price and have complementary marketing with other parts of the business, such as customer service or social media presence.
Diversification can be used when a business finds that their customer base has become too similar – diversifying means adding new lines that cater specifically to older generations or younger people who enjoy different styles than those available now (for a clothing line business example).
How do you grow a company? First, you need to implement a strong growth strategy from day 1.
A growth strategy is essentially a collection of tactics that embody your company’s plan of action for growing revenue and market share.
This is what makes your position more dominant, stable and ready for expansion. But most importantly it helps determine the overall direction of success for your company too!
Businesses need to plan for growth from the very beginning.
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Now, let’s talk about the 4 major growth strategies for small businesses and startups: market penetration, market expansion, product development, and diversification.
The goal of this strategy is to increase your market share by attracting customers away from a competitor or ensuring them that they are buying the best product. You can accomplish these goals with decreasing prices, increasing promotion and support distribution for existing products, acquiring rivals in the same field as you, and making slight changes to what’s already out there on shelves.
Market expansion is the process of analyzing a company’s existing offer and finding new ways to sell it on different markets or in unexplored regions. By targeting customer segments that previously have not been marketed towards, expanding into new areas within the country where customers are underserved by competitors, or reaching out internationally with your offerings you can grow what was once an established market.
It should be noted that when looking for opportunities to expand one must consider all potential prospects- from industrial buyers who may need an item they never knew existed before due their needs as well as local consumers who may want products tailored specifically for them rather than general items offered nationwide.
New products or services are launched on existing markets. Product development is used to extend the offer proposed to current customers with the aim of increasing their turnover by providing them with more options and promotions that they can choose from.
This process may be achieved through:
These strategies all lead towards increased profits upon sale!
Diversifying your company’s strategy is riskiest, but can be the most rewarding. Diving into new markets with never before seen product and service launches will yield high-reward outcomes if you’re successful.
The time frame to diversify should be considered carefully as it may take a while for success in these efforts to show up on paper or lead investors to believe that this was a wise decision.
For more on diversification, I recommend reading this article by Forbes magazine.
There are four types of growth strategies, and they can be used for startups as well as established companies. The first strategy is market penetration, which means that you’ve been in the market before but want to grow your customer base by capturing more customers. Market development entails creating a new segment or niche for your product so that it expands into other markets. Product development refers to developing a new product with an existing core competency such as when Apple introduced the iPod; diversification involves taking on different industries rather than just one industry like when Facebook moved from social networking site to e-commerce company with their acquisition of Instagram.
Which type of growth strategy do you think would work best for your business? Leave a comment below.
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