We’re all for consistency, but a healthy business is more than just a flat line on a graph. As a leader, it’s your responsibility and your privilege to ensure that your company does more than just maintain a stable status quo — it’s up to you to foster opportunities that grow your business both internally and in the market. Growth is always a journey; thankfully, a solid growth strategy serves as your trusty road map.
Laying a Foundation: What Is a Growth Strategy?
It’s crucial to make one thing clear from the outset: A growth strategy is not just a business strategy by another name. While your business strategy outlines how you intend to compete and grow at a profit, growth strategy is a bit more granular.
As the Gartner Glossary defines it, growth strategy is your business’ plan for “overcoming current and future challenges to realize its goals for expansion.” That last word is the key here: expansion. Increasing market share? Driving up revenue? Acquiring new assets? Improving your products and honing your services? Those are all growth strategy goals, and each one matters because each and every one will serve to expand your company.
The Types of Growth
Just as each business is unique, so is every growth strategy. An effective strategy is pliable and dynamic, but that broad sort of application can make it difficult to know where to start. That’s why starting with a goal is your best bet. In this way, your growth strategy fills in the blanks on the path to each goal you set. To zero in on that, Altametrics breaks down business growth into four basic types, each of which is a valid target for your company’s growth strategy:
Organic growth is fortunately among both the simplest and the most effective types of growth. When you put a new product on the market, launch a new online storefront or roll out a new type of service, that’s all organic growth. The growth naturally stems from you simply doing business; more products lead to more sales, more store space leads to more customers and so forth.
Strategic growth targets the long term, often leveraging the assets you’ve gained from organic growth to invest in future initiatives. Examples of strategic growth include expanding your marketing reach into new territories or making plans to introduce a whole new line of products.
Internal growth is exactly what it sounds like. Unlike outward-facing types of growth, internal growth thrives on available resources within your company. With internal growth, you use the resources you already have as fuel for expansion.
Partnerships, acquisitions and mergers are advanced growth strategies that offer high risk and high reward. These types of growth are usually the domain of established businesses, where a successful partnership, acquisition or merger can dramatically increase collaboration, innovation, capabilities and customer base.
Crafting a Growth Strategy
While your company’s growth strategy will ultimately be uniquely yours, you have at least one key advantage before you even get to work: You can learn from growth strategies that have already proven to be effective (and even craft a template from those experiences, but we’ll get to that in a bit). At the forefront, successful growth strategies often focus on factors in these categories, which you can adopt for your own business:
Market growth: As Act! reminds us, market penetration is a growth strategy that increases market share, with tactics including bolstered advertising or lowered prices. Market development, on the other hand, focuses on promoting and developing existing products so that they target new customers. Alternative channels are marketing-oriented growth strategies that encourage you to shake up your marketing methods, such as launching a new website, joining a new social media platform or starting an email marketing list.
Product growth: Product expansion introduces new versions of your products or services while phasing out old ones, while product development aims to strengthen existing products in their current markets or introduce new products in those markets. Product diversification, which is a bit riskier, intends to sell new products to new markets.
Market segmentation, or dividing your market into various segments that each have their own separate focus, is another viable element of growth strategy. Segments might break down by geography, demographics or behavior, for instance. Simply reassessing elements such as your company’s value proposition (what your product or service does and why the customer needs it) or redefining your brand relevance (what is it, specifically, that is most relevant and resonant to customers?) can also motivate growth. Finally, acquisitions, mergers and partnerships aren’t just types of growth; they can serve as actionable elements of your growth strategy, too.
Learn From the Best
Nowadays, we’re certainly not lacking for highly visible precedents as we study high-yield growth strategies. Whether you’re a businessperson or just a fan, you’ve certainly heard of Disney’s pivotal acquisitions of Pixar, Marvel, Lucasfilm and 20th Century Fox. That was a growth strategy that has netted the mouse over $33.8 billion to date, according to IMD. Not all growth strategies are that financially earth-shaking, though. Prophet recounts the experience of redefining Olive Garden’s brand relevance. What was most relevant to the restaurant’s customers? Two words: breadsticks and family. And so the straight-to-the-point Breadstick Nation campaign was born.
On the product side, Proof Technologies points to Apple’s consistent product introductions as a beacon for product development. Think about the annual new iPhone model or the introduction of new products like AirPods to the company’s existing markets. For a successful example of product diversification, look no further than Furrion, which expanded from luxury RVs and yachts to home appliances with a whole new visual identity.
A Growth Strategy Checklist
If you need a launching pad to get your growth strategy mobilized, the infographic experts at Venngage offer a straightforward, five-step checklist:
Identify and set your high-level growth strategy goals.
Identify and understand how those goals will impact your resources (and vice versa).
Try a test run of the tactics you’ve designed to achieve your goals.
Evaluate and validate those experiments.
Foster and validate everyone on the team as they put the growth strategy into action.
That last step might just be the most overlooked and the most important element of growth strategy, no matter the size or makeup of your business. From the day-to-day consumer side down to the very deepest levels of the internal side, sustainable growth is almost always people-driven.
As a freelance writer, small business owner, and consultant with more than a decade of experience, Dan Ketchum has been fortunate enough to collaborate with leading brands including Chron.com, Zacks, MSN Money, Discover, Office Depot, Fortune, The Motley Fool and more.