Your business growth won’t happen by accident, it takes careful planning and execution of a detailed strategy, but every business is different, so how do you go about creating such a growth strategy. Modelling on other modern business growth examples is a great place to start. My guide to planning an unstoppable growth strategy covers the key elements to focus on when developing your business growth strategy.
You simply must have a game plan if you are to achieve your business growth goals. Your growth strategy is your plan of action to increase your business’s market share. It needs to be specific to your business type, industry, target market and your finances.
To help you decide which is the right strategy for your business it may help to look at some successful business growth examples.
Strategic business growth examples include:
- Market development
- Market penetration
- Product development
- Additional distribution channels
In this post we’ll look at companies who’ve employed these strategies and succeeded in achieving their growth objectives by examining each example and a company who has successfully applied it.
1. Market development growth strategy
A market development strategy is:
“ a growth strategy put in place by companies or organisations to introduce their product or solution to target audiences they have not yet reached or are not yet currently serving”. (airfocus.com)
An example of a company employing this growth strategy to good use is McDonald’s. They are constantly developing their markets by launching their existing products in new markets. The company has 34,000 restaurants and a presence in 118 countries and plans to launch its outlets into other nations.
Their market development strategy has helped the company expand by allowing third parties (franchises) to serve their products under the McDonald’s brand name.
They often attract attention in new geographical regions using customised products based on what’s popular there – e.g. the McAlloo Tikkin in India or McArabia in Saudi Arabia. They sometimes lower prices depending on what the new target market will bear to help them get established there.
2. Diversification growth strategy
A diversification business growth strategy is:
“ A growth strategy that involves entering a new market or industry – one that your business doesn’t currently operate in – while also creating a new product for that market” (nibusinessinfo.co.uk)
Amazon provides us with a good business growth example here. The company’s growth was fueled by diversification, since they were one of the earliest online retailers to offer consumers the ability to buy online. They started by providing customers with a larger selection of books than they could find in physical stores.
Because Amazon operated purely online they weren’t limited by shelf space. And customers could check the online store to see if a book was in stock – they didn’t have to traipse to a brick and mortar store to find this out. Amazon then used their experience in books to expand into new markets and offer DVDs and electronics for sale. As we know they’ve continued to grow their offerings ever since – having now expanded into groceries – and even into physical stores.
3. Market penetration growth strategy
A market penetration business growth strategy is:
“When a company works towards a higher market share by tapping into existing products in existing markets. It’s how a company grows business by increasing sales among people already in the market.” (Hubspot)
When it comes to business growth examples around market penetration, Facebook jumps to mind. Facebook took over the social media environment by focusing initially on a narrow target customer base (Harvard students) – then expanded gradually.
Once they’d gained traction they expanded to other colleges, then, once established they expanded to non-students. This measured approach to expansion meant they could adjust their offering to meet the needs of each new customer segment – and as a result they avoided the pitfalls the likes of MySpace fell into.
4. Product development growth strategy
A product development strategy is based on:
“Developing new products or modifying existing products so they appear new, and offering those products to current or new markets”(Steen solutions)
Google provides us with an example of this type of business growth. Google started as a business-to-consumer search engine. To establish a source of revenue they then developed a new product – AdWords, targeting businesses in order to get them to pay for advertising. This meant they had to develop new capabilities to cater for their new audience. At the same time they also ensured AdWords didn’t affect current consumer users. This involved them maintaining the speed of the search engine and offering text ads which looked like other search engine results.
5. Adding a new distribution channel to fuel growth
Healthy snack brand Graze was an instigator of the subscription box revolution, however tons of new entrants saturated the market making it tough for them to compete. They responded by expanding from an exclusively direct-to-consumer model, into retail. Graze products can now be found in supermarkets and high street stores everywhere. Adding a new distribution channel turned out to be a life-saver.
When you’re thinking about developing a business growth strategy you need to consider your type of business, your growth goals and the stage of the business life cycle you’re currently in. It also pays to look around at your competitors for some business growth examples relevant to your industry. What’s working for them may well work for you.