Business
Growth Strategy
According to BusinessDictionary.com growth is the process
of improving some measure
of an enterprise's
success.
Business
growth can be achieved either by boosting the top line
or revenue
of the business with greater product
sales
or service
income,
or by increasing the bottom line
or profitability
of the operation
by minimizing costs.
According to the McKinsey Growth
Pyramid businesses should develop their growth strategies based on the
following:
·
Operational Skills
·
Privileged Assets
·
Growth Skills
·
Special Relationships
Operational Skills – “Core Competencies” of the organisation that
provides the foundation for the growth strategy.
Privileged Assets – Are unique assets that the company possess that
are hard for competitors to replicate.
Growth Skills – Represent the specific skill set that the
organisation will need to effectively manage their growth strategy.
Special Relationships – Strategic relationships that can open up
new doors.
Options and investment structures for a
growth strategy
Existing products to existing customers – Has the lowest
risk, because it is about increasing the frequency of purchase and building
customer relationships.
Existing products to new customers –
Focus on providing new products to your existing client base by providing them
with products that they buy from competitors.
New Products and Services - This
strategy has slightly higher risk as you are developing new products and then
try to sell them to existing clients (That know and trust your brand) or to new
customers (That might require more aggressive marketing efforts).
New Delivery Approaches – There is
growth opportunities in the distribution channel by selling existing products
and services via new or emerging channels.
New Geographies – Geographical expansion
is one of the most dynamic sources of growth, but one of the most difficult to
implement.
New Industry Structure – This
strategy includes the options of acquiring competitors or suppliers in an
attempt to consolidate industry.
New Competitive Arenas – This growth
strategy forces business to think whether there is opportunities to integrate
vertically or consider whether the skills of the business could be used in
other industries.
Conclusion
The growth strategy that would be best suited to your business will depend
on the industry that you are currently in, the level of competition, ease of
access and the level of risk that you are willing to take. For more information on becoming a Great
company read “Good
to Great” by Jim Collins
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