Are you aware of the numbers in the financial statements of some of the leading companies in the world? For instance, Apple once was a small unknown firm, but now they are pulling more than $50 billion in net profits. Sounds crazy? Well, it has taken years for them to achieve this success. There have been thousands of companies that started small but failed later. You wonder why? Simply because entities like Apple have used the correct business growth strategy fitting to their business, and others have not. Considering the significance of business growth strategies for small businesses, I will discuss the best business growth strategies that will help you boost your sales.
Top 4 Business Growth Strategies
Market penetration is probably the best growth strategy for some small businesses. Here, small businesses basically market their products in their industry, hoping to achieve a more significant digital marketing share. It might actually get quite competitive as other companies usually join the rivalry. That is where some businesses gain competitive advantage through multiple strategies.
Diminishing the Selling Price
Your guess is as good as mine if you have not heard of this strategy. Mainly popular for retailers, it is implemented primarily on occasions where there is no differentiation from other products. So, let’s say you sell dietetic curd with no flavor. And besides you, there are seven different companies in the business doing this work. By lowering your selling price even a little bit, you can achieve to boost your retail sales. The logic behind it is simple. The rational buyers will see no difference between your product and other products, and will choose yours.
Increasing Promotions for Your Product
It is another one of the common but highly effective business growth strategies. What you do here is offering special discounts, organizing promotional events, etc. It will be not only attractive to your current customers, but also other buyers in the market will hear and come to your product.
Making Improvements on the Product
In this case, you will usually need to do very little to entice more customers. For instance, making a small change in the packaging would be enough. Nevertheless, you can do a little more things to benefit your clients. Let’s base our example on the previous dietetic curd. What you can do here is decrease the calorie of the product a little bit. Offering a slightly smaller package would do it, too.
As you noticed in the above examples, it is possible to grow your business even when a market gets bigger. That said, it is possible to grow your business by expanding the market you are in. And that is called market development. Also known as a market expansion strategy, it enables businesses to expand to other markets.
I recommend you to use this strategy in cases when you feel the current market is not enough for you. In other words, when there is abnormally intense competition. Let’s look at the example to understand this business growth plan better.
Imagine that you are selling a product for health and wellness. And at the moment, you are facing very tough competition in the current marketing trends. Coincidentally, you find out that this product is also perfect for skincare. Being aware of that, you automatically understand that there is another market for your product, which is the beauty market. And next, you find yourself in that market, boosting your profits.
One of the best aspects of market development strategy is you do not always have to change anything with your product. With just one product, you target more than one market. But in some cases, you can reevaluate your product, and come up with ideas to make it more suitable for other markets.
In general, I advise you to be careful when using this strategy. Especially, in the cases when an international expansion happens, the market research should be done very comprehensively. Otherwise, the likelihood of you failing miserably is quite high.
Expansion does not only apply to the market. Product expansion is another highly useful business growth strategy you can adopt.
As you understand, there is no new market here. The only variable is the product.
Overall, this strategy is mainly typical of businesses competing in technology-relevant industries. That said, small businesses can use it to achieve growth in their market, as well. For instance, expanding the product line by presenting new products can be a pretty effective method. You can also add new features to your existing product to attract more clients. Further, it is possible to update the features of the product instead of offering a new product.
My advice to you is to be quickly reactive to changes in the market if you want to adopt this strategy. If you are not fast enough, you will literally lose with this strategy. Just think that until you finish the new product, a new change will appear in the market. Needless to say, you will already have to adhere to that to stay competitive. In a nutshell, respond with lightspeed to changes.
Merger and Acquisition
Merger and acquisition are another one of the highly effective business growth strategies. It is true that this strategy is more usual for large companies. First, because the large business will have the necessary resources to acquire another company. Second, if small businesses make acquisition, there will be a moderate risk of failure. That said, nobody can say that merger and acquisition is not suitable for small businesses. If your acquisition turns out to be the right decision, then you will benefit significantly from it.
You may wonder how it will benefit your small business. Well, initially granted, your business will achieve a more significant market share and revenue. Besides, your position will be the dominant one in the market. You will also be able to break the geographical boundaries thanks to this strategy. Now you will have a chance of getting popular all over the world.
Why I see the merger and acquisition strategy as one of the best business growth strategies is it provides options for small businesses.
Here a small business will try to have a merger with a larger firm in the same industry. As a result, they will operate as one company. Businesses usually adopt this strategy to combine the forces of two entities and secure their workers. But the upstream acquisition is a great way to guarantee larger investments. The motive behind this is created the value of purchase becomes very enticing for investors.
When a small business acquires another small or smaller business than itself, it is called downstream acquisition. When it happens, the acquiring company becomes the surviving one. It, at the same time, takes over the control of the acquired company. The acquired company, on the other hand, loses its identity. The downstream acquisition is mainly implemented when a business wants to expand its operations. If you ever want to do it, I advise you to buy a company that you can afford.
The lateral acquisition is made between two businesses that are almost the same size. It is usually done to unite the resources of both companies. The achieved outcome would be a new company that is substantially larger than them both separately.
The role of business growth strategies in the lives of many companies is unquestionably significant. I would even say it is the key driving factor that they use to grow. And now, you are aware of the best business growth strategies, too. Bear in mind that for specific businesses, different approaches may work the best. So, before deciding to adopt any of the above strategies, think wisely. I hope this article will help you in practice. To learn more about related topics, please check out our page.