Business Growth Strategies with Examples

Shalom Solomon 2nd September, 2021

Growth is generally a concept that defines increase in size. In business, growth can refer to changes in different things. Business growth can refer to increase in size of the businessâ€™ workforce or client base, it can also mean a change (mostly positive), in the businessâ€™ values.

This is why, there is no one metric to measure growth in business.

While this is the case, business growth can always be seen in significant positive changes associated with a company or business. In this recent decade, there has been a surge of new businesses globally.

Statistically, there are about 305 million (Yes, you read that right), MILLION startups every year. Now, the shocking stat here is that, around 90% of this number fail within their first ten years.

According to Failory, 42% of these startups fail because they have no market need, another 17% fail because they have poor products, other reasons included, poor marketing, disharmony among team, lack of passion and worse, a poor business model.

The factor with the highest percentage of control over the success or failure of a business is market need. Humans they say at times, are fickle creatures, as such, trends change with time and in the same way, businesses have to change with trends to remain relevant in the market.

Letâ€™s take Nokia for example, in the last two decades, when flip phones and GSM phones were the in thing, Nokia was largest vendor of mobile phones, there were other competitors like Samsung and others.

A decade later, Smart phones took over the phone market and Nokia lost its place at the top of the ladder mainly because it did not invest in manufacturing of touch screen mobiles at that time.

Now, other companies like Samsung were able to move with the trend and provide products that were needed by their target market and were able to maintain relevance.

Photo Credit: Pixabay

In business, growth occurs when a business or company is ready to expand and searches for a way to increase its productivity.

Hence, it is plausible to say that when a business model or system of running your affairs isnâ€™t producing desired output, it is required as a business owner, that you search for ways to increase productivity in your business.

Now, although these are not set in stone, there are proven strategies for business growth. These strategies if used well, will increase the competitive edge of a business in the market. We will discuss these below.

Market Penetration:

Market penetration is often used as a metric to determine the market share of a product and its potential for new sales. Market penetration can also be used as a strategy for growing a business.

Once a clear cut understanding of your productâ€™s market share is established, you can work towards gaining a higher percentage using market penetration strategies.

The most common of which is reduction of the cost of the product. Another strategy for market penetration will be producing a similar product and selling it at a very low price compared to that of the market leader.

This strategy has most often led to the target market shifting to the cheaper product thereby, reducing the market share of the leading product.

Product Expansion:

Product expansion is another strategy for business growth. Here, the business develops new products that may appeal to its client base. For instance, a construction company might decide to start selling paints too.

That means, its clients can also buy paint from the company to complete their construction. This strategy reduces the cost for a marketing campaign as, the target market is the companyâ€™s existing client base.

Market Development:

This strategy is solely aimed at increasing the number of potential customers. It involves developing and implementing series of well detailed and researched action steps to increase a companyâ€™s client base.

Strategies for market development include: advertising, direct sales, social media ads, etc.

Diversification:

Diversification unlike the other strategies above, involves a complete movement by a company into a new industry with also a new product for the new industry. A company enters a new market one that it did not operate in previously by creating a new product for the market.

For instance, still using our construction company, the company may decide to diversify by also going into interior decoration or the furniture market.

This market is similar to the industry it occupied previously but also a significant shift away from the construction market.