Assess your options for business growth
Business growth strategies
There are many ways to grow a business. Which way you choose to expand largely depends on your ambition, your reasons for growth, and the opportunities and resources available. However, two crucial factors for choosing a growth strategy exist. They are:
- products - what you currently offer, and what you'd like to offer in the future
- markets - where you currently sell, and where you'd like to sell in the future
Based on these factors, strategic tools - such as the Ansoff matrix - suggest four main types of business growth strategies.
What are the four major growth strategies?
Four main strategies for growth, each with their own distinct benefits and risks, are:
- market penetration
- product development
- market development
With market penetration, you try to sell more of the same things to the same market. The risks are usually low as you focus on capturing a bigger share of your current market with the products you already have. Learn more about market penetration strategy.
With product development, you are introducing a new product into your existing market. You're effectively selling something different to the same customer, potentially encountering greater risks. See more on product development strategy.
Another option is market development, where you try to sell an existing product in a brand new market. For example, you may want to segment your existing market or reposition your product in it, or target an entirely different geographical area. See market development strategy.
Finally, with diversification, you are aiming to sell completely different goods or services to completely different customers. This is typically the riskiest of options - it requires both product and market development. Read more about business growth through diversification.
Other ways to grow your business
Every business is different. You may need to adapt some of the suggested strategies to suit your particular circumstances. For example, you may want to explore:
- strategic partnerships
- improving efficiency in your business
You may also want to construct your own unique combination of strategies.
The best approach will usually be the one that suits your overall strategic plan. Focus on finding an option that could yield most results from the least amount of risk and effort.
Keep in mind that, to succeed, your growth strategy has to be deliberate. Success will require a great deal of research and thorough planning for business growth.