To take market share from your competition, you don't have to be a multibillion-dollar worldwide brand. You'll need an unstoppable business expansion strategy.
Growth, of course, entails danger. As a result, really successful companies rarely rely on a single strategy. Instead, they win by combining a variety of growth methods such as market development, disruption, product expansion, channel expansion, strategic partnerships, acquisitions, and organic growth.
Continue reading to discover seven of the most effective company growth techniques used by brands to outperform the competition.
Let's speak about some high-level ideas about what makes any growth strategy effective before we get into specific development tactics.
First and foremost, you must understand your brand's identity and DNA. You should also be aware of your advantages, positioning, and distinction.
A constant focus on your core talents leads to growth. This is exemplified by Walmart. They've achieved stratospheric growth by providing the lowest pricing to clients.
Second, any successful business growth strategy requires extensive audience awareness. You must understand your clients' problems and wants, and you must be able to meet their demands better than your competition. As a result, you'll increase customer loyalty and referrals through word-of-mouth (WOM).
Most importantly, growth marketing necessitates agility. Small pivots, such as adjusting marketing approaches to meet current trends or client behaviour, will undoubtedly be required. However, in order to attain your growth goals, you may need to undertake large-scale changes.
Shopify, for example, began by selling snowboarding equipment before realising they were better at developing ecommerce software. A willingness to adjust in both little and broad ways can help a company grow much faster.
There have traditionally been four major business growth strategies. I did, however, add to the existing foundation by adding a few more. So, here are seven different types of business growth methods you can utilise to propel your brand forward.
A market penetration strategy (also known as market development) is a business expansion approach in which you try to sell your existing items into previously unexplored markets. This entails identifying new markets for your present product line that would be a good fit.
Because it allows you to expand beyond your current clients, market development is a typical growth approach. As a result, you'll increase your market share. Targeting a new industry, demography, corporate department (e.g., moving from HR to finance), or geographic area is one example of segmentation.
Bain & Company looked at 1,850 organisations' growth-driving activities to see how they may achieve long-term, profitable growth. According to the findings, organisations achieve the greatest profitable growth when they enter a target market that is next to their current one.
Market development as a business growth strategy is clearly demonstrated by Facebook. They began as a product that was only available to Harvard University students. They went on to include Stanford, Columbia, and Yale after that. The platform was then made available to all Ivy League colleges as well as a number of Boston-area schools. Then it was opened up to colleges all throughout the United States and Canada. Beyond the initial concentration on colleges, Facebook has extended to a wide range of audiences.
Coming into a well-established business controlled by a few legacy brands and doing things radically differently than everyone else is known as market disruption. You can possibly disrupt a market in a number of ways, including:
Creating new items or adding new features to current ones can be a very efficient way to expand your business. Product creation allows you to reach out to new audiences who may not have previously been interested in your business.
Semrush is an example of a business that began with a basic SEO and sponsored search platform. The company has added a lot of features over the years, and it is now quite a sophisticated software suite. The target audience has remained constant throughout. SEMrush's commercial expansion approach has paid off, as the company now has a market capitalization of more than $2.7 billion.
New distribution channels are among the top ten business growth methods since they boost revenue without requiring product adjustments. Ecommerce companies like Allbirds have improved income by expanding their physical presence. Initially, Allbirds was only available online, but they now have 29 physical locations.
The discovery of a new distribution channel by one company can sometimes result in a tsunami of change across the industry. Take, for example, Salesforce. In an industry dominated by massive, expensive, sophisticated enterprise software that required an army of professional support people to get it to operate, they introduced the concept of cloud-based, subscription software. Salesforce grew quickly after that, and it now has a market capitalization of more than $21 billion. The software market has evolved, and there are now a plethora of alternative SaaS options available.
Strategic alliances with other brands can help you achieve growth that you wouldn't have been able to achieve otherwise. For example, partnering with a company that offers a complementary product or service gives you access to their audience, and vice versa. You'll also get referrals from your strategic partner, and you'll reap the benefits of their brand's goodwill.
The relationship between Lyft and Taco Bell is an example of a successful strategic partnership. Customers could request a mid-trip stop at a local Taco Bell ("Taco Mode") with a simple tap within the Lyft app. Taco Bell saw an increase in sales as a result of the agreement, which resulted in free exposure for both firms.
Strategic collaborations might also be focused on developing a new or improved product. Looking at Taco Bell once again, a collaboration with Doritos resulted in the Doritos Locos Taco. To say it was a huge success would be an understatement. Doritos Locos Taco sales reached $1 billion in the first 18 months of the new product's launch.
Acquisitions are perhaps the most obvious means to expand. Acquisitions are often only a viable growth option if you have a considerable amount of cash flow and/or financing capacity.
Acquisitions have a number of significant advantages. By acquiring direct competitors, they enable you to lessen competition. They provide you access to proprietary technology that would take a long time and a lot of money to develop on your own. They also provide you access to the consumer base of the purchased company.
Rollups are one of the most efficient and dependable business expansion tactics available. A rollup entails the purchase of several smaller enterprises in the same market. Through economies of scale, the goal is to obtain higher cost reductions and efficiencies.
Alera Group, a provider of employee benefits and HR solutions, is an example of this, having grown to 1,700 people primarily through acquisitions.
Organic growth is by far the best of all the business expansion tactics. It means you may build your business without relying on mergers and acquisitions. When it comes to your marketing plan, it indicates you're growing without the need for advertising, which means you'll stop growing once you stop investing.
A home goods firm in a $29 billion market moved from nothing to 3% market share in 5 years, largely through organic growth. The firm attracted 340,000+ monthly organic visits to its website, which was a crucial driver in its quick growth.
Your client acquisition cost is lower, your return on marketing spend is higher, and you're on a smooth upward trend with organic growth. The more organic growth you can achieve, the less money you'll have to spend on marketing and the more money you'll have to invest in growing your brand, creating new goods, and pleasing your consumers.
Klarna is causing havoc in the online payments market by executing many growth plans at the same time.
The fintech startup, which was formed in 2005 in Stockholm, Sweden, allows customers to make purchases without paying in full at the time of purchase. Instead of paying in full, customers can divide their payments into four interest-free instalments, pay the full amount within 30 days, or pay over three years. As a result, buyers who pay in instalments see a 45 percent rise in average order value.
Klarna has also been concentrating on geographic expansion, entering new markets in Europe and then the United States. Klarna now serves 90 million customers in 17 countries through a network of over 250,000 businesses. Every day, the Klarna technology processes over 2 million transactions throughout the world.
There are a number of excellent business growth tactics. Companies like Klarna are able to achieve significant growth in a short period of time by integrating numerous techniques.
Most businesses, like Klarna, aspire for expansion. The difficulty, of course, is determining which methods will be most successful for your business and how to properly implement them.
So, how can you put a successful business expansion strategy into action? Let's have a look at the most important aspects.
Market research should be carried out.
Whatever growth plan you choose, you must first conduct study. Market research can help you learn more about your present clients as well as potential new business opportunities in underserved markets. It will assist you in identifying market trends, growth possibilities, and potential entry hurdles that may limit your performance in a new market.
Audience research will assist you in gaining a better understanding of not just your present market, but also future prospective new audience segments that may benefit from your products. This information can disclose their purchasing habits and interests. You can also find out which channels they utilise the most, which will help you define your client acquisition strategy.
Competitive research enables you to acquire a comprehensive idea of how you compare to your competitors in your existing market, as well as who holds market share in potential new markets. You may identify areas where your competitors are vulnerable and then capitalise on those possibilities if you have a thorough understanding of them.
Finally, keyword research provides insight into how your target audience thinks. It reveals what your current and potential clients are looking for as they progress through the buying process. You may use keyword research data to develop a content strategy, uncover topics they're interested in, and build the perfect experience for each consumer touch point along the path.
You can set precise growth targets once you have a strong understanding of your present market as well as where you wish to grow (new markets or existing markets). Goals are critical components of every growth strategy because they direct the behaviours that lead to success.
All growth objectives should be measurable, and quantitative objectives should have deadlines.
You can track your progress and improve your activities over time by setting specific goals. You can make changes to your approach as needed to guarantee that your growth goals are met.
Decide which growth plan you'll use to attract new consumers and meet your objectives after you've set your growth targets.
Will you go for organic expansion or go for acquisitions? Alternatively, you might use a combination of strategies to achieve your objectives. Multiple corporate growth plans are obviously more difficult to implement. However, as we witnessed with Klarna, it's a surefire way to improve your performance.
Your budget, goals, opportunities, competitors, timetables, and predicted market share targets will all influence which plan or strategies you adopt.
If you're a startup entering an already competitive market, market disruption methods may be necessary. You might also use strategic partnerships if you're a huge shop with a significant budget and require immediate short-term advantages.
If you want to expand organically in the long run, you'll need to invest in SEO and content marketing.
Your growth strategy's nitty-gritty specifics are contained in your execution plan. It's the specific steps you'll take to turn your growth strategy into a reality. If you're planning to employ acquisitions as a growth strategy, for example, specify the exact gaps you want to fill or the new target segments you want to reach.
Don't be ambiguous in your execution strategy. Describe your growth strategy in detail so that you and your team members understand what needs to be done, when it needs to be done, and how it will be accomplished. All of this planning establishes accountability and makes it more likely that you will meet your targeted growth targets.
Once you've defined your growth strategy and begun implementing it, track the main metrics that reflect your progress toward your objectives on a regular basis. The metrics you use should be strongly related to your overall growth objectives, rather than vanity measures that have no influence on actual outcomes.
If your goal is to raise revenue for a specific business line by 20% in two years through a regional expansion strategy, the size of your social media following isn't the greatest indicator to track. Rather, you might want to keep track of location-specific information, as well as site traffic and conversion metrics from new regions.
The more you track and measure your growth efforts, the clearer it will become to identify which aspects of your execution strategy are working and which aren't. Double down on something that's working very well. If a strategy isn't working, consider making some changes. If that doesn't work, consider shifting.
Even if you're making significant investments in any of the above business growth tactics, you should maintain some flexibility in your approach. You might find that some of your marketing activities aren't generating enough market traction. Perhaps a new regional focus lacks product-market fit, whereas a different area could deliver the intended outcomes instead. Alternatively, if you're an internet firm that's now adding brick and mortar locations, you can speed up the pace of additional store openings if your original batch of stores is performing well.
Continually improve your business growth strategies' activities, and you'll come out on top in the end.