10 Types of Business Growth Strategies

Calling all business owners looking to grow their business, there are so many different strategies that you could use, but are you aware of them all? All businesses might hit a plateau, but if you're not constantly trying to find new ways to grow your business, that's when you should be seeing red flags. Various critical factors contribute to the success of a business, and whether you aim to enter new markets, expand your products, or boost your customer supper, here are some strategies to help you elevate your business' success. 

Organic growth

Ideally, every business wants to be able to grow as organically as possible. Essentially, organic growth is a long-term approach to facilitate growth and consists of the company's profitability and revenue increasing with only its existing products, markets, and operations and not having to rely on various external factors. 

Diversification

Diversification is another growth strategy that consists of entering a new industry or market that your business is not already operating in. The objective of diversification as a growth strategy is to gain access to new customers and generate new revenue streams, all while decreasing risk. The two main types of diversification are: 

• Related diversification - expanding into businesses related to your current services and products
• Unrelated diversification - entering into markets and industries that are unrelated to the business's current industry

Acquisitions

When a company buys a majority or all of another company's shares, this is what is referred to as an acquisition. There are various methods used to acquire another company, and it can be quite a complex transaction that involves many strategic, financial and legal considerations. Lloyds corporate advisory can assist you in implementing the right growth strategies, such as assisting you with acquisitions. 

Market segmentation

Market segmentation focuses on dividing a broad target market into small groups of customers based on their similar needs, behaviours and characteristics. This growth strategy allows you to tailor your marketing, products and services and improve your competitiveness and profitability by meeting the needs of each market segment. By better understanding your target market and how to serve your customers, you ultimately improve your marketing effectiveness and can greatly increase your revenue. 

Market penetration

Market penetration is a growth strategy that works well for businesses with a strong foothold in a specific market that wants to increase their market share or fortify themselves against the competition. In this strategy, you'll increase the sales of your existing products within your market and aim to sell more of them. This is achieved by adopting various marketing tactics to increase visibility, including: 

• Sales promotions
• Discounts
• Advertising 
• Improving distribution channels

Market disruption

A growth strategy that essentially creates a new market that has not existed previously or changes the operations of an existing market by meeting pain points is referred to as market disruption. It is a risky strategy to undertake due to it involving a lot of uncertainty and major investments, however it is a high risk high reward situation.  

Market development

Selling existing products in new markets allows your business to focus on finding new customers without having to develop new products. This growth strategy may require you to find new applications, target new demographics or even expand into new locations. In order to successfully implement this strategy it will require you to conduct market research so that you can pinpoint new opportunities, assess your competitors and better understand the needs of your new target market. 

Joint ventures

For those who would prefer to grow by forming a partnership with other companies, then a joint venture may be the growth strategy you need. Within a joint venture, you and your new partner or partners will agree to combine your resources and expertise in order to achieve your desired goal. Everything from profits and losses, risks and ownership will be shared. 

Vertical integration

Vertical integrations is a growth strategy where you will expand your operations through manufacturing and distributing. What happens is your business will take control of some of the different stages of the production process. There are two main tyes of vertical integration: 

• Backward integration - when you expand into upstream activities like producing raw materials or acquiring suppliers
• Forward integration - when your expand into downstream activities like owning distribution network and retail stores

Growth investing

As the name suggests, if you want to grow your business sometimes all it takes is investing. This is a stock-buying technique and is suitable for companies that are predicted to grow faster than their industry or market. This strategy involves investing in companies with high growth potential when they're starting up or still in early stages of development and is aimed at generating long-term capital appreciation.

Final Thoughts

Should business owners be implementing every one of these growth strategies? While all of these strategies can benefit your business and help you achieve the growth that you're after, sometimes it just takes identifying which avenues are going to be the most beneficial. When you are looking to grow your business and need advice on where to focus your efforts, you'll want to hire a seasoned business advisor.