Every business wants to grow. All organisations, big and small, are always seeking new avenues to grow and succeed. This process of writing down the business strategies pursued both to grow its revenue, and ultimately, its profits. These tactics are not simply arbitrary. Strategic patents are carefully designed approaches to take a company to the next level. Business growth strategies are, essentially, there to guide the way. They lead companies to grow, thrive, and prosper.
Let’s take a look deeper by examining what business strategies means, different types of business growth strategies, examples and how small businesses and startups can leverage them.
What Are Business Growth Strategies?
Every business wants more. More customers, more sales, more profits. To do that, it needs a plan. That plan is known as a business growth strategy.
A business growth strategy is a series of steps a company takes to grow. It helps businesses enter new markets, introduce new products or find more efficient ways of doing things. Companies that pursue a growth strategy don’t leave success to chance. They have a clear destination and a roadmap to arrive.
Another benefit of this strategy is that it focuses a company. This prevents them from throwing random ideas and ensures that they tend to do things that work. Guidelines are provided through growth strategies and all major companies today have adopted one or more of them.
Why does it matter?
Business growth strategies are important because without a plan, your business will be lost. It makes sure every step goes towards better results.
Types of Business Growth Strategies
Business growth strategies come in all shapes and sizes. They all suit slightly different objectives and contexts. Some want a quick path to growth. Others want to grow fast.
The following are crucial business growth strategies:
Market Penetration Strategy
It involves offering more of your own goods to current customers. It can accomplish by:
- Cost reduction
- Offering discounts
- Running advertisements
- Enhancing the quality of service
- Look into getting into the market if your product is good and customers are happy.
Market Development Strategy
Discovering new markets for your existing products is referred to as market development strategy.
For instance, if you sell in one city, you may sell in another. Or you can attempt to reach some different age category or income group.
This kind of tactic expands your product’s reach to potential customers.
Product Development Strategy
A type of strategy that involves developing new products to sell into your current market. Instead, you are already familiar with the people who purchase your services or products. So, you offer them each something new to try.
A soap company, for instance, might begin producing body lotion.
Diversification Strategy
Business strategy that involves developing new products for new markets. It possesses greater risk, but also greater reward.” This type of strategy is used by a company moving into an entirely different line of business.
| Strategy Type | What it Achieves | Level of Risk (Low, Medium, High) | Example |
| Market Penetration | Sell more of what you currently sell | Low | Discounts to help sales |
| Market Development | Different customers, same product | Medium | Take your product to new city or country |
| Product Development | Market as usual, new product | Medium | Launch new line |
| Diversification | Entirely new industry | High | Launch entirely new type of product |
This is how these type of business growth strategies help a company select the correct path to go ahead.
Business growth strategies for small business
Small businesses have less money and fewer people. So, they need smart plans. Business growth strategies for small business must be based on quick and low-cost methods. Growth is still possible. All it takes is the right steps. Small business growth strategies are all about leveraging what you have to reach more people and earn more revenue.
Focus on local marketing
Local advertising, word of mouth and community events can be helpful. Customers love local support. And social media pages for your city or neighborhood allow small businesses to expand quickly.
Use referrals
Satisfied customers attract new ones. Give rewards for referrals. This is cheaper and gets the job done.
Add new services
If you’re running a salon, offer home visits. If you have been selling cakes, include online delivery in your services. Keep it simple and useful.
Improve customer service
The better the service, the longer customers stay and the more they buy. It also aids in creating a good name for your business.
Sell online
Even the tiniest business can sell fast online. Widen the net: Platforms such as Instagram, Amazon or your own site can expand your reach.
Example:
An Instagram account appears for a small candle shop in a local market. Orders come in. They begin ship nationwide. They maintain high quality and respond quickly to messages. Before you know it, they become a big brand. It is in clear terms an example of business growth strategy.
Hence, business growth for small business is not complex. They are small steps in the right direction.
Marketing strategies to grow your business
You could have the best product, but if the marketing is insufficient, nobody knows about it. Marketing strategies for business growth assist you in shaping product story and expanding product reach.
Know your customer
Read this step to know who your customer is What do they like? What are they doing online, and where in particular are they spending their time? What problems can you help them solve?
When you know your customer, you can create better ads, better messages, better campaigns.
Use digital marketing
The best tools for growth come from online platforms. Experiment With SEO, Email Marketing, Social Media, and advertisement tools like Google Analytics to monitor your growth.
Social media is useful for reaching people quickly. Explore Instagram, Facebook, and YouTube. Share useful content. Feature your customers and share their stories. Run offers.
Content is king
Write blogs. Make videos. Share tips. People will believe you when you are providing value. That means more leads and more customers.
Run targeted ads
Google ads and Facebook make it easy to find the right people. You can select the area, age, interest, and so on. So your money is well spent this way.
Work on branding
Create a logo. Choose a color theme. All your posts must be in the same voice. Establish a memorable brand.
And marketing helps you acquire new customers and retain old ones. Therefore, Market strategies for business growth should not be ignored.
Example of business growth strategy
Real stories inform us how growth operates. To explore this better, let’s look at a business plan growth strategy example that digs deep into a plan of action.
Example: Zomato
Zomato began life as a restaurant review website. It listed menus and ratings. But it wanted to grow. So, it added food delivery. Then it added Zomato Gold. It now also offers grocery delivery.
How did it grow?
- Market Penetration: They onboarded new restaurants and promotions.
- Product Development: Food delivery was a new service.
- Diversification: Grocery delivery was a field entirely new.
This was a proven business growth strategy example, wherein a brand expanded step by step. It employed virtually every type of business growth strategy.
They were aware of what their customers wanted. It gave them more incentives to use the app. It made smart moves. Now It’s a Top Name in the Food Industry
Business Growth Strategies for Startup
Startups are new. They are small. But they grow fast. For that, they require robust plans. Business growth strategies for startups involve Speed, Focus, and Smart Moves.
Focus on the problem
Startups solve a problem. So, the first thing is to make sure that solution is clear. Your product has to be solid and it has to be useful.
Build an MVP
Do not wait for the best product. Begin with an MVP (minimum viable product). Launch fast. Learn fast. Improve fast.
Find Early Users
Offer free trials or early access. Let people test it. Get feedback. This builds a fan base.
Scale only after success
When your small group of people loves the product — grow. Pay only when the customer gets real.
Use funding smartly
Most startups raise money. Leverage it to refine your product, approach great talent and fuel your marketing. Don’t spend on big offices or ads that don’t convert.
Growth Strategy for Start up business
Digital channels are often used by startups to grow fast. They utilize paid advertisements as well as SEO, content marketing, and influencer tie-ups. Another popular method is growth hacking.
For instance, Dropbox gave away free storage in return for referrals. That helped it grow fast. A very effective strategy for start up business growth.
Relevance to ACCA Syllabus
Business growth strategies are critical for ACCA candidates, especially in Strategic Business Leader (SBL) and Strategic Business Reporting (SBR) papers. Such strategies can better gauge how entities intend to grow, mitigate risk, and provide value to stakeholders. Strategic alternatives, competitive evaluation, and long-term growth planning are also part of ACCA.
Business Growth Strategies ACCA Questions
Q1: What kind of strategy is market development?
A. Selling more of the same to existing customers
B. A completely new product line
C. Selling existing products in a new country
D. Raising the prices of existing products
Answer: C
Q2: What is the most important risk associated with a diversification growth strategy?
A. Loss of existing customers
B. Access to existing markets
C. Lack of employee interest
D. Entering a new market with a new product
Answer: D
Q3: What is it called when you create new products for an existing market?
A. Market penetration
B. Market development
C. Product development
D. Diversification
Answer: C
Q4: A company is trying to lower its prices to capture greater share. What strategy is this?
A. Product development
B. Market penetration
C. Diversification
D. Vertical integration
Answer: B
Q5: What is a core reason for a growth strategy in strategic business planning?
A. Increase in liabilities
B. Greater turnover of employees
C. Of profit maximizing and developing organization
D. To increase tax expense
Answer: C
Relevance to US CMA Syllabus
US CMA comprises financial planning, analysis and strategy. Hence, business growth strategies can be a never-ending conversation. The ability to analyse strategic plans, performance management and linking those to strategic objectives of finance are essential.
Business Growth Strategies US CMA Questions
Q1: What is NOT a business growth strategy?
A. Product development
B. market penetration
C. financial auditing
D. market development
Answer: C
Q2: When marketing an updated product to existing customers, which strategy works best?
A. Product development
B. Market expansion
C. Diversification
D. Leadership in cost
Answer: C
Q3: What does “market penetration” mean?
A. Creating new products for a new market
B. Promoting existing products to a new market
C) Providing more of the company’s products to existing customers
D) Launching a new product line
Answer: C
Q4: Which growth strategy would be the riskiest and most expensive?
A.Price skimming,
B. product development,
C. diversification
D. market penetration
Answer: B
Q5: If an organisation employs vertical integration growth strategy excessively, it will:
A. Manufacture raw materials or distribute products
B. That is, focus only on the growth of the market
C. Do other stuff outside the business model
D. Transition away from the existing business model
Answer: A
Relevance to US CPA Syllabus
Business structures, strategy, and decision making are included in the BEC (Business Environment and Concepts) section of the US CPA Exam, for instance. Businesses grow, and understanding that gives CPA candidates insight into the strategic context surrounding financial decisions and risk assessments.
Business Growth Strategies US CPA Questions
Q1: Name one strategy CPAs counseling a client entering a country for the first time might recommend.
A. Product development
B. Market development
C. Market penetration
D. Backward integration
Answer: B
Q2: But what are the Most Common doubts that stop every small retail business from opening an online store?
A. Diversify business
B. Introduce new product
C. Market development
D. Retrenchment
Answer: C
Q3: How are these strategies similar with respect to making a business that can sell more units on a repeating basis without needing to change the product itself?
A. Product development
B. Diversification
C. Market penetration
D. Cost-cutting
Answer: C
Q4: Unlike traditional measures used in CPA business planning, CPA business planning is focused on:
A. Increase taxes
B. Slow, steady growth and long-term value creation for shareholders
C. Add more debts
D. Ignore new markets
Answer: B
Q5: A recent client of yours is looking to launch something new, and sell it to new customers. What is this called?
A. Market penetration
B. Product development
C. Market development
D. Diversification
Answer: D
Relevancy to CFA Syllabus
Business growth strategies address how a company can grow above a certain rate and they too are an important part of CFA curriculum especially Corporate Finance and Equity where to know a company ` s valuation, capital allocation and also risk-return profile one needs to know how will the company grow. All analysts need to understand how companies achieve growth to estimate future cash flows and assess investment viability.
Business Growth Strategies CFA Questions
Q1: So which business growth strategy is most likely to enhance op risk & reward?
A. Market penetration
B. Market development
C. Diversification
D. Rebranding
Answer: C
Q2: A company strategy report suggests new markets for existing products. This is an example of:
A. Horizontal integration
B. Market development
C. Diversification
D. Restructuring
Answer: B
Q3:Which of the following is a company that used customer loyalty programs as a growth driver?
A. Market penetration
B. Product development
C. Mergers and acquisitions
D. Vertical integration
Answer: A
Q4: You now hold a position in equity analysis as part of a multi-national conglomerate which has embarked on an organic diversification growth strategy.
A. Have stable returns
B. Reduce operational risk
C. Have volatile earnings
D. Noticeable improvement in financial reporting
Answer: C
Q5: Analytical, important to know introduction of new products(new product — existing — market). That impacts valuation in that:
A. It raises taxes
B. It can result in increased revenues and brand loyalty
C. It reduces competition
D. Asset underperformance
Answer: B
