What are the Most Effective Business Growth Strategies

Have you ever thought why only 1/3rd of the start-up companies are sustainable? Why only 0.01% of that 1/3rd startups manage to climb the competitive ladder and turn into big business brands? The statistics are depressing but this is the truth hard to accept. The only reason behind turning start-ups to fully thriving large companies is effective business growth strategy. The owners or the designated professionals of successful brands have clear insight into their respective companies, functionalities, line of products or services, and are well attuned to the market trends. They constantly explore and execute innovative and beneficial business growth strategies for increased growth and higher profit margins.

Business growth strategies not just cater to envisioning organizational goals but also inculcating substantial plans to compete with all the competitors on your journey towards your long-term goal. You may face failures, there may be risk, you may have to overcome challenges but you should be deliberate and determined not to lose yourself or your business to your competitor.

Here are the 4 effective business growth strategies defined by the Ansoff Matrixintroduced by Igor Ansoff:

Strategy 1: Market Penetration

Market Penetration is a risk free business growth strategy that works with an approach to penetrate the existing market with the existing product. For example, a watch company slashing down its price as a promotional offer to attract more buyers and increase sales.

You can implement the strategy in the following ways:

· Increasing market share of the existing product

· Reducing prices of the existing product

· Enhancing the distribution channel

· Increasing marketing and promotional initiatives

Strategy 2: Product Development

Product development is a strategy with an approach to introduce a new product or infuse innovation in the current market with a clear understanding of the current market trend. For example, the growing two-wheeler market introducing e-scooters to fulfill the need of the existing auto market where environment-friendly means of transport has become an asset.

You can implement the strategy in the following ways:

· Investing in research to come up with innovations fulfilling the needs of the existing market

· Acquiring competitor’s product and infusing the same with your research, analysis, and resources to come up with a completely new and useful product

· Undergoing strategic partnership to have better reach with increased distribution

Strategy 3: Market Development

Market development strategy works with an approach to enter new markets with your existing product. For example, an Indian shoes company venturing into foreign countries for distributing its line of product to a new demographic.

You can implement the market development strategy in the following ways:

· Venturing into new domestic regions to have a firm establishment in the domestic market

· Expanding internationally with your existing product to have a strong global presence

· Fulfilling the needs and aspirations of various customer segments

Strategy 4: Diversification

Diversification strategy is a strategy that works with an approach to diversify your products and your markets in the following ways:

· Introducing related products and entering into markets that synergize with your existing line of business. This is also known as backward diversification. For example, a leather bag company introducing leather shoes is related or backward diversification.

· Introducing products and entering into markets that have no connections or synergy with your existing market. This also known as forward diversification caters to strengthening the future prospects of your existing business. For example, an investment company venturing into tourism sector is an unrelated or forward diversification.