Key Growth Strategies
Turning a small
business into a big one is never easy. The statistics are grim.
In other words, most businesses start small and stay there.
But if that's not good enough for
you—or if you recognize that staying small doesn't necessarily guarantee your
business's survival what follows are some options that can help you create a
growth strategy of your own.
v Internal Growth
· Market
Penetration. This is the least risky option of selling more products to current
customers. Find new ways for customers to use your products.
· Market
Development. Develop ways to sell product to an adjacent market by expanding to
another city or province.
· New
Distribution Channel. You may expand by offering product on line.
· Product
Development. The classic growth strategy offers new products to existing and
new customers.
v Integration
· Horizontal.
This strategy would involve buying a competitor. This not only adds to growth
of your business but eliminates a competitor.
· Backward.
This involves buying a supplier and in addition to growth provides increased
control of the supply chain.
· Forward.
If appropriate you could buy a component of your supply or distribution chain.
This provides increased overall margin through profits at each level of product
sales.
v Diversification
· This
involves growing the company by buying another company in a sector unrelated to
your business. This can be risky and certainly requires an understanding of the
new market place.
Growth
strategies are never pursued in a vacuum, and a company needs to be willing to
change course in response to feedback from the market. Too often, companies
take a year to develop a strategy and, by the time they're ready to implement
it, the market has changed on them.
The
marketplace generally rewards those with agility, decisiveness and ability to
capitalize when opportunities are presented.
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