Every business, whether small or developed, aims at one thing which is growth. However, growth does not come by chance. You definitely have to work towards it. It comes by hard work and by practice. Therefore, If you want your brand to develop, there are certain growth strategies that you must follow.
In this article, we will explore two things: the Ansoff model and four effective growth strategies that you, as a matter of fact must know as a small business owner.
The Ansoff Model
This model comprises two growth axes which are “products and the market”.
This is also a strategic tool that you can use when you’re planning or developing a growth strategy for your business.
Products
What sort of products are you offering now and in the future, what products would you like to offer? It is pertinent that you put this into consideration of your growth development strategy.
Market
Who is your target audience? Which market do you currently attend to or serve? Also, which market do you want to serve in the future? This is also a major thing you have to put into consideration for your development strategy.
Effective Growth Strategies
Market Penetration
This means penetrating the market for profit-making. This is attracting the customers of your competitors as well as keeping your customers to buy your existing products. You can achieve this by decreasing the price of your products. By doing this, more people will buy your products because it is cheaper than every other brand’s. You must also ensure that you offer them quality at all times.
Market Development
Market development is the process of expanding the market by looking for ways you can sell your products that are already existing in new markets.
Product Development
You have to produce new products and launch them in your existing market. This is the objective of project development. You can obtain this by investing in the research and development of products asides the ones you produce, acquiring the rights to produce someone else’s products by buying the products and rebranding it, or going into joint ownership with another brand who also need access to your brand’s distribution channels, and with same objectives.
Diversification
This refers to exploring new products and unexplored markets. It is a very risky strategy to growth development as it involves marketing by the company which produces completely new products and services on an entirely new market.
There are several categories of diversification. They are as follows:
- Horizontal Diversification: Involves a company developing or purchasing new products for sales to existing customers.
- Vertical Diversification: Entering your suppliers’ or customers’ sector. For example, if your company is into building, you can diversify into selling construction materials and the likes.
- Concentric Diversification: This is developing new products that are in line with or similar to existing products.
- Conglomerate Diversification: This is like an entire diversification process that entails producing new products that are entirely different from the existing products but which may appeal to new clients.
Conclusion
Based on everything discussed above, a company can employ one of these strategies for their growth depending on their approach and risk management abilities.
