Navigating the Path to Success with a New Growth Strategy for the Digital Age
Have you read Jeffrey Archer, the best-selling American author’s first novel “Not a penny more, not a penny less?” In the plot, Harvey Metcalfe, a street smart mogul would choose a wrong team to cheat by conning them into buying an inflated oil stock. When the team of four suffers from the failed stock, they would hatch a plan to get their lost money back. Each of them would have their own strategy to succeed in their final mission. They would go on to execute a well-organized strategy involving a paper company, selling a fake Van Gogh painting and ransacking greenhouses meant for the wedding flowers. By stating this example, we can explain what is a strategy, as per layman’s understanding. The team of four’s mission and plan was to get their stolen money back, not a penny more or less. To accomplish that, they need a strategy. They need sub-plans to get the major picture rolling. When a strategy succeeds or fails, it is going to bulldoze the bigger picture.
While sticking to professional language, there are different strategies in use including business strategy, growth strategy and brand strategy.
Unveiling the Growth Strategy’s Core
According to the definition given by Business Dictionary, a growth strategy involves a calculated method intended to secure a larger market share, even if it means sacrificing immediate profits. Diversification, product development, market penetration, and market development are the four main pillars of this strategy. Organizations can proactively navigate the market landscape, increase their market share, and generate long-term success by shifting the company focus to growth.
Utilizing Growth Strategies: Crucial for Long-Term Success and Business Survival
Small biz trends state that of the businesses started in 2014, only 56% of the businesses made their way through 2018. That’s a scary statistic indeed! The competition is at its peak now. It is getting harder to sustain in this ever-growing and ever-changing market. Hence if you wish to sustain over here for the next 20-50 years, it is a must to come up with growth strategies where you can win a larger share of the market even where you are going to involve short-term earnings.
Types of growth strategy
As stated by Business dictionary, there are four types of growth strategy: diversification, product development, market penetration, and market development.
If you are going to observe successful leaders, you can see that they would require their business to prosper and grow in real-time. They are open to change and do not shy away from implementing new business models. They keep moving forward with the changing times and find new ways to engage with their new customers. This is to ensure that they can increase their profits considerably. Diversification is nothing but expanding your product or services for the sake of your business growth. Making use of this strategy when you want to make use of the new market would be the best choice. When you want to launch a new product after completing the research and development, you need to find ways through which you can reach out to new customers. This is not going to happen in a snap. Hence you need to diversify as per the market standards. Disney started out with fun parks and ended up expanding its role in the market of cruise ships. Apple started out with laptops and ended up in the online music business. This way, they were able to hoist their flag in different domains and create a strong name for their parent brand. There are endless examples of diversification like Amazon and Airbnb. They have carved a special seat for themselves in the industry.
Usually, diversification is of two types: Internal diversification and External diversification. When you launch a new product once the research and development, production, product purchase and the market analysis is complete, you call it under internal diversification. In the case of external diversification, your company would expand its functions through different acquisitions, mergers, new technologies and sub-companies.
You make the products for your customers. It would be of foremost importance to know how much of a product or service your customers are using in comparison to the total market estimation. You can use market penetration to develop new strategies that can be employed when you want to increase your market share meant for a particular product or service. When you want to relate your potential customers who purchased your product instead of your competitor’s, you involve market penetration. In a nutshell, when a company takes the strategic step towards developing the existing market without looking for any new market, then you get to call it market development. The company is going to look for new buyers when you pitch your product to a new segment when you want to increase your sales. This is known as Market penetration.
Calculating your Market penetration is easy when you know your total addressable market (TAM). You would be able to calculate your market penetration rate using this formula:
Market penetration = (Number of customers + Target market size) x 100
Industries such as utility companies, food chains and smartphone manufacturers can benefit more from this growth strategy.
Product Development Strategy:
A few years ago, a company could survive in the market just by creating a simple product and get benefitted for the upcoming years. But nowadays, the market is fiercely competitive. The wrath of the market would be more if the industry has been faced with disruption or the market has saturated with regards to single product design.. It would burst the bubbles of your revenue. Companies have started understanding how important it is to diversify themselves in the market. If that has to happen, then you should involve product development strategy. With this strategy, you get to develop new products or modify any existing products in order to make it appear new. You can then offer the products in your current market. You employ these strategies when you have no growth opportunity or little growth opportunity in the current market of the company. When this is the case, any company would have three choices: They need to update the existing or current product in the market; they have to enhance their product to fit the new market; They have to discard the product entirely from the market. Majority of the competitive companies would not choose the third option. Hence it would always be wise to choose the first and second option.
The best example of Product Development strategy would be Nissan. When there were growing environmental concerns among their consumers along with a rise in gasoline prices and the requirement for a reliable vehicle, Nissan went on to develop its own electric vehicle. This led to the overall success of the brand at a great rate.
The Wikipedia definition for Market development would be “a growth strategy that identifies and develops new market segments for current products.” You get to develop completely new market segments that could cover up the products present at present. When you want to indulge Market development, it would involve a 2-step process where a company would indulge in market research and segmentation analysis. They would then shortlist different market segments they deem worth pursuing. You get to make use of the already present product or service when you want to attract any new customer. The goal of this growth strategy is to broaden the reach and deep dive into an unexplored market. A small segment would define the larger section of the population. The company’s marketing team could divide the market on the basis of the demographics, geography along with the income levels. When the company is able to choose the segment, the market development would involve creating a promotional strategy when you are set to enter the market. Hence companies have to get the support of both visual and sound media such as digital marketing and social media marketing when they want to enter the deep cave of the market.
Your product pricing would also play a crucial role. When you have competitors in your market, you need to be careful about how you price your product or service. You can then come up with a new product belonging to the same type but differing in terms of quality and features when the price has to be high. The firms would face the challenge of higher costs. They would require more capital investment when they are ready to keep their project up and running. If your investment would not give the expected results, then the entire exercise would be useless.
Companies that have killed it with their Growth Strategies
A website that publishes a lot of content, BuzzFeed, generates an astounding 9 billion views of its content each month and runs like a relentless content engine. The constant emphasis on virality that BuzzFeed places on content is what has fuelled the company’s incredible rise. CEO Jonah Peretti saw how critical it was to satisfy readers’ demands for sharing content and actively sought out their input.
BuzzFeed adopted a data-driven strategy and extensively tracked traffic and social media shares to determine their performance. This made it possible for them to quickly adjust to the shifting reading preferences across various platforms and meet the needs of the social crowd. The business also made large expenditures in sponsored videos, thus broadening its content offerings. Delivering on customer demands consistently while balancing originality with a keen awareness of their audience’s needs is at the heart of BuzzFeed’s major growth strategy.
This consumer review site was able to reach over 176 million unique users in a month when they gamified their reviews. Yelp has grown its social aspect by implementing win-win strategies for its users. They were able to increase their existing network when they rewarded their users when they achieved particular behavior. They made new user levels where their users can receive “Elite” status when they write great reviews on a frequent basis. Yelp was judging the user reviews on the basis of a number of factors. This would include the detail, number of votes, approval and much more. These are the factors making Yelp quite shareable. They taught their loyal users how they can create quality content through rewards when they up their Yelp content quality.
Get bigger and better with Growth Strategy
A strong type of business growth strategy is not only going to improve your business but also increase your sales and ROI. When you want your brand to reach the next stage, you can involve the right growth strategies with the help of an expert team. Here are a few advantages of adopting the best growth strategies:
Avoid Eye-watering Debt:
Debt control would involve knowing how much you would owe to someone else. You get to pay your bills on time, decide which debt would be your priority to focus on and make a monthly calendar on the basis of your debt management. You get to use emergency funding, make a monthly plan budget and carry on much more activities. By ensuring that you do not have any debt inline, you get an opportunity to handle all your activities without any worries. When you are going to involve growth strategy, you can ward off those giant debts that are going to accompany your growth strategies. When a manager wants to expand the business quickly, then they can organically improve their growth with effective strategies. When a manager is in debt, they are going to take on more debt or dilute their company’s equity when they get fund expansion. The debt is going to be extremely costly when the sales are not going to be very high. Managing your debt is going to be tougher if you do not have proper strategy in hand. Hence your team should ensure that you are going towards the right path by ensuring that you have proper growth strategies in your case.
Get Better support from the Management:
Managers often encounter troubles when they want to expand into new markets along with other regions. They would always find the logistical and financial challenges burdening them. The challenges faced logistically and financially are going to be hard to tackle, even when more skilled managers are going to handle it. You would be forced to take up a business model where there is no flexibility. When there is a steely growth strategy, you can easily avoid all that.
Get rid of neck-breaking competition:
When you are going to face competition, it is going to be extremely hard to leap up through the next stages. You can easily expand into a new market but not into a market dominated by bigger sharks. When you have the best growth strategies in hand, you need not face the tussle of competition. You can keep sailing without any storm on your way.
Avoid Investor Pressure:
Initially, an investor might support you through the beginning phases. As time passes, your investor might want to make a quick profit and invest that money into a new company. When you do not have a proper growth strategy in hand, your growth is going to come at a halting phase. It is when you come across your investor pressure at every point in time. To avoid this, it is essential to develop a growth strategy where you grow considerably, without letting your investor’s expectations down.
Keep pace with the market: When you introduce fast-paced technologies in the market, then it is time for you to let your customers get the maximum out of it. When you are going to involve the same old skool technologies and methodologies, your customers might find it boring. Hence you need to keep pace with the market and the changing trends and technologies. Your growth strategy has to be set in such a way as to accustom all these criteria.
Grab more opportunities:
When there is an upsurge in your consumer’s interests and expectations, you need to leverage your business opportunities to accustom them. As your team is all set to put in more effort to take you on a cool ride, you should accustom yourself to the changing environment. Your growth strategies should reflect this while you are supported by your growth strategy consulting firm.
Provide more job opportunities:
When a company is growing, you are obviously going to have a better time when you attract and hunt more talents in the market. Creative individuals are going to have more space to innovate themselves. You get to build an extremely strong and supportive team with whose support you get to approach the market with a fresh perspective. When you have a strong growth strategy, you are going to pave way for eradicating the unemployment scenario.
Attract the PR:
Who would not like to take media coverage seriously? When your business is employing the best growth strategy, you are all set to garner attention like never before. This is more powerful in comparison to advertising. When you are going to offer new stuff which your people would love to listen about, you are bound to create more media attention.
Build your brand:
Brand building is an ever-growing process. You need to build a quality product and let it sustain in the market for a considerable period of time. Only then would it return back the reap of what you have sown earlier. When you have built your brand, you need to employ the best ever strategies to maintain your value in the market. This is going to be a forever practice. When you focus on adding value to your customers, you would eventually build your brand prowess. It would take a lot of time but at the end, with constant effort and dedication of your team, it is all going to be worth it.
Growth Strategy Navigation: Insights and Perspectives
A growth strategy must be developed over the long term, much like a marathon rather than a sprint. It takes constant work to develop a solid plan that supports your company’s objectives and motivates your employees. Over time, the actual effects of a well-designed growth strategy become apparent. You can establish yourself as a market leader by putting the best types of business growth tactics into practice. Consult with specialists who have the essential knowledge and insights if you want advice on how to create an effective growth strategy. You may create a route to enduring success by working together.
Pattem Digital- The master chef of growth strategies
The process of creating a growth strategy can be challenging, particularly in the area of UX research. However, by using Pattem Digital as your exclusive provider of growth strategy consulting services, you can reduce the effort by 50%. In order to help you reach your full potential, we take pride in providing customized experiences that adhere to industry standards. Our team is totally dedicated to assisting you in your growth journey, from thorough documentation to ongoing maintenance. Trust Pattem Digital to be your dependable partner in streamlining your expansion plan and fostering long-term commercial success.