Few businesses grow without a commitment to do so, and it’s a process that takes thought, management and planning. Most importantly it’s a choice and a mindset.
So if you’re ready considering taking your business to the next level, here are the four strategies famously outlined in the Ansoff matrix to “make it so”.
More of the same, to the same people (market penetration)
Probably one of the least risky options, this is about market penetration. It relies on marketing your product for more regular use by existing customers, and/or reaching more customers in the same market. It tends to involve aggressive promotion to reach a higher sales volume.
It can be achieved by:
- Price decrease
- Increased promotion and distribution
- Acquisition of a competitor
- Product refinement
More of the same, to new people (market development)
The next option is to broaden your horizons, to take your existing product and seek out new markets, whether that’s going national, international or taking your product or service from domestic to commercial application.
It usually relies on a unique product or service, but the benefits include:
- Economies of scale in production
- Previous experience
Different services or products to the same people (product development)
Another option with reduced risk, this involves offering similar or complementary products to your existing customer base. It can involve:
- Creation of your own new products/services
- Obtaining the rights to market someone else’s new product
- The purchase of other people’s products and rebranding them in your own name,
- Joint development of a new product in conjunction with another business.
New items and services to new markets and customers (diversification)
This final strategy probably presents the greatest risk, as it involves both market and product development. But when tied in with a solid business plan, this option can lead to real revenue and growth. This is particularly the case if you have a bi-product of your existing manufacturing process that can be marketed effectively.
A prime example may be a sugar mill or factory that can create electricity during their refinement process which can be sold back to the grid, or who sells their waste as fertiliser.
Questions to ask yourself
Regardless of which growth option may interest you, there are a series of question to pose first. They include:
Are you interested in growth or revenue? – Because if it’s purely the latter then there are other ways to achieve your aim, including increasing your profitability by plugging sales leaks or raising prices.
Are you committed? – Growth takes commitment, planning and more often than not investment, and like starting a business, you have to be ready for the ride.
Do you have a plan? – No growth should be undertaken without proper planning and an assessment of the risks involved.
Have you secured your existing business? – If you do decide to go ahead, ensure your existing business is secure first – that you have dotted the “i’s” and crossed the “t’s” with ownership of your intellectual property and assets.
The final word
Business growth is the opportunity to take your enterprise to a new level, but the key is being ready, being prepared and being committed to the task. Only then are you primed to take the next step.