Growth alliances are strategic collaborations between companies. They further the growth goals of the involved parties. Take JCPenney and Sephora. For Sephora, it can’t hurt for the makeup retailer to have more stores across the country. JCPenney, however, needed to keep up with powerhouses like Macy’s and its fully-fledged makeup section.
14 Types of Business Growth Explained
Businesses of any size look for ways to expand their market share and increase revenues. Companies often choose to implement specific growth strategies to advance their business. Understanding these strategies can help you lead strategic initiatives for company growth. In this article we explain the types of business growth strategies used by companies today with ideas to help you grow your organization.
Business growth is a phenomenon that occurs when business owners, employees and outside factors influence the success of a company. A business grows when it expands a customer base, increases revenue or produces more product.
Growth is the goal of most businesses and is the reason behind many decisions that affect the daily workings of a company both internally and externally. Business growth is impacted by consumer trends, market opportunities and decisions made by company leadership.
Strategic: A strategic approach focuses on long-term growth through specific initiatives. Businesses often move into this growth stage after a period of organic growth. Companies may try to gain a share in untapped markets or plan to produce new inventory.
Business Growth Strategy
A growth strategy allows companies to expand their business. Growth can be achieved by practices like adding new locations, investing in customer acquisition, or expanding a product line. A company’s industry and target market influence which growth strategies it will choose.
1. Use a growth strategy template [Free Tool].
Don’t hit the ground running without planning out and documenting the steps for your growth strategy. We recommend downloading this free Growth Strategy Template and working off the included section prompts to outline your intended process for growth in your organization.
2. Choose your targeted area of growth.
It’s possible that your growth plan will encompass more than one of the initiatives outlined above, which makes sense — the best growth doesn’t happen in a vacuum. For example, growing your unit sales will result in growth in revenue — and possibly additional locations and headcount to support the increased sales.
3. Conduct market and industry research.
Researching the state of your industry is the best way to determine if your desired growth is both necessary and feasible. Examples could include running surveys and focus groups with existing and potential customers or digging into existing industry research.
4. Set growth goals.
These goals should be based on your endgame aspirations of where you ideally want your organization to be, but they should also be achievable and realistic – which is why setting a goal based on industry research is so valuable.
5. Plan your course of action.
6. Determine your growth tools and requirements.
The last step before acting on your plan is determining any requirements your team will need through the process. These are specific resources that will help you meet your growth goals faster and with more accuracy. Examples might include:
7. Execute your plan.
Throughout this time, make sure you’re holding your stakeholders accountable, keeping the line of communication open, and comparing initial results to your forecasted growth goals to see if your projected results are still achievable or if anything needs to be adjusted.
Free Growth Strategy Template
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1. Viral Loops
Some growth strategies are tailored to be completely self-sustainable. They require an initial push, but ultimately, they rely primarily (if not solely) on users’ enthusiasm to keep them going. One strategy that fits that bill is the viral loop.
Ideally, your incentive will be compelling enough for users to actively and enthusiastically encourage their friends and family to get on board.At its best, a viral loop is a self-perpetuating acquisition machine that operates 24/7/365.
Instead of needing as many leads as possible at the top, a viral loop funnel requires just one satisfied user to share with others. As long as every referral results in at least 1.1 new users, the system continues growing.
2. Milestone Referrals
Companies that leverage viral loops generally offer a flat, consistent offer for individual referrals — businesses that use milestone referrals offer rewards for hitting specific benchmarks. In many cases, "milestones" are metrics like the number of referred friends.
For example, a business might include different or increasingly enticing incentives that come with one, five, and 10 referrals as opposed to a fixed incentive for each referral. A company will often leverage this strategy to encourage users to bring on a volume of friends and family that suits its specific business goals.
The strategy also adds an engaging element to the referral process. When done right, milestone referrals are simple to share with relatively straightforward objectives and enticing, tangible products as rewards.
3. Word-of-Mouth
4. The "When They Zig, We Zag" Approach
Sometimes the best growth strategy a company can employ is standing out — offering a unique experience that sets it apart from other businesses in its space. When monotony defines an industry, the company that breaks it often finds an edge.
Say your company developed an app for transitioning playlists between music streaming apps. Assume you have a few competitors who all generate revenue through ads and paid subscriptions — both of which frustrate users.
In that case, you might be best off trying to shed some of the baggage that customers run into trouble with when using your competitors’ programs. If your service is paid, you could consider offering a free trial of an ad-free experience — right off the bat.
The point here is that there’s often a lot of value and opportunity in differentiating yourself. If you can "zig when they zag", you can capture consumers’ attention and capitalize on their shifting interests.
5. In-Person Outreach
It might be a while before this particular approach can be employed again, but it’s effective enough to warrant a mention. Sometimes, adding a human element to your growth strategy can help set things in motion for your business.
Prospects are often receptive to a personal approach — and there’s nothing more personal than immediate, face-to-face interactions. Putting boots on the ground and personally interfacing with potential customers can be a great way to get your business the traction it needs to get going.
This could mean hosting or sponsoring events, attending conferences relevant to your space, hiring brand ambassadors, or any other way to directly and strategically reach out to your target demographic in person.
6. Market Penetration
Competition is a necessary part of business. Imagine that two companies in the same industry are targeting the same consumers. Typically, whatever customers Business A has, Business B does not. Market penetration is a strategy that builds off of this tug-of-war.
Market penetration increases the market share — the percentage of total sales in an industry generated by a company — of a product within a given industry. Coca-Cola, the most popular carbonated beverage in the United States, has a 42.8% market share. If competitors like Pepsi and Sprite were looking to increase market penetration, they would need to increase market share. This increase would imply that they are acquiring customers that were previously buying Coca-Cola or other carbonated beverage brands.
7. Development
If a company feels as if they have plateaued and their current market no longer has room for growth, it might switch strategies from market penetration to market development. While market penetration focuses on a company and its current market, market development strategies lead businesses to tap into a new one.
Authorship:
https://www.indeed.com/career-advice/career-development/types-of-business-growth
https://blog.hubspot.com/sales/growth-strategy
