You’ve probably heard about the four growth strategies if you’re an entrepreneur or small business owner. You may even have a long list of to-dos for each — it’s time to stop!
The following are the most certain forms of growth strategies to get you your most desired outcome:
- Market penetration
- Product development
- Market expansion/growth
- Diversification
Here’s what you need to know about these techniques to ensure the constant growth of your business:
Market Penetration
The main aim of market penetration is to boost current sales of services and goods in active markets, which in turn raises the market share. Market penetration ensures that your business can increase its market share by driving purchase frequency and luring its clients away from your competitors.
Businesses can also use account-based marketing as a form of marketing penetration to concentrate resources on their market share. Account based marketing allows organizations to determine and examine the business return on investment. Visit
https://insightsabm.com/blog/how-to-determine-the-roi-of-account-based-marketing/ to learn more about account based marketing.
The impact of account-based marketing depends on factors such as organizational goals, budget, and market characteristics. To achieve market penetration, businesses focus on the following:new
- Price reduction
- Increasing distribution and advertising
- Competitor acquisition
- Constant product improvements
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Diversification
Diversification entails developing completely new products for a new market. Diversification is the most uncertain growth method because it bears the most risk. The following are the forms of diversification:
Horizontal Diversification
Horizontal diversification refers to businesses creating or acquiring new products to market them to their current customers newmags. For instance, a business that produces pens may develop a new product in a related industry, such as notebook or ink production.
Vertical Diversification
Vertical diversification simply refers to the acquisition of a customer, a supplier, or both in a supply chain. It’s also known as vertical integration. Typical businesses only participate in one process in a supply chain.
Vertical diversification happens once it takes on other responsibilities in the supply chain. A notable example is a cell phone manufacturing company acquiring a semiconductor chip manufacturer.
Concentric Diversification
Concentric diversification is the creation of a new line of services or goods comparable to an existing product line i.e. new energy drink flavors coming up when old flavors decline in sales irtdaily. Small and medium consumer goods manufacturers adopt this growth strategy to remain competitive.
Conglomerate Diversification
Conglomerate diversification occurs when a business switches to new services or products unrelated to its current offering, but which are interesting to new client groups. It includes the following examples:
- An electronics company venturing into sports
- A gaming franchise venturing into the transport industry
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Market Development
Market development means growing the sales of present services or products in underdeveloped markets. To grow a market, a corporation must constantly come up with new ways of presenting, marketing and selling its present product or service.
The market development approach is more effective by focusing on international markets, various customer demographics (industrial buyers, government organizations), and new geographic segments locally.
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Product Development
The goal of product development is to provide new products or services to markets that currently exist. It increases the offer provided to present customers to increase sales.
For instance, a firm that makes football shirts may target the same market with energy drinks and playing shoes businesslognews. Product development involves:
- Purchase of the rights to create someone else’s goods
- Branding products
- Investment in the development and research of further items
- Co-development and partnerships with other businesses that need access to the company’s distribution networks or brands
The concept of growth strategies has been the topic of discussion for decades and it revolves around how a business should go about growing its client base.
Growth strategies also enable a business grow through economies of scale and build up its product portfolio to increase sales artdailynewsonline. Achieving these goals is not an easy feat because there are many variables involved and each company plans differently depending on their own growth strategy.
