While Ireland has a long track record in attracting large multinational companies, its over 100 High Growth global companies have established their operations in Ireland.
However, with this surge in large multinationals growing it is important to remember the life blood of the Irish economy are SMEs and they need to grow and flourish at the same pace as MNC’s. Making smaller business more profitable involves looking at ways to increase sales revenue as well as decreasing costs and benchmarking the business to see where money can be saved. There are several methods companies use for implementing a growth strategy. Some common growth strategies in business include market penetration, market expansion, product expansion, diversification and acquisition.
For many leaders, it is a constant struggle to define ways to grow a business. Consequently, many senior leaders further complicate matters by over-thinking and over-engineering their growth strategies. Below are some simple ways to grow your business.
One growth strategy in business is market penetration. A small company uses a market penetration strategy when it decides to market existing products within the same market it has been using.
Market penetration is the measure of the amount of sales or adoption of a product or service compared to the total market for that product or service. In addition, market penetration can also include the activities that are used to increase the market share of a particular product or service.
A market expansion growth strategy, often called market development, entails selling current products in a new market. There are several reasons why a company may consider a market expansion strategy. Firstly, the competition may be such that there is no room for growth within the current market. If a business does not find new markets for its products, it cannot increase sales or profits. A small company may also use a market expansion strategy if it finds new uses for its product.
A company may also expand its product line or add new features to increase its sales and profits. When small companies employ a product expansion strategy, also known as product development, they continue selling within the existing market. A product expansion growth strategy often works well when technology starts to change. A company may also be forced to add new products as older ones become outdated.
(Example: Coca-Cola had huge sales with diet coke, however it was considered an overwhelmingly female drink. At this point they introduced Coke zero into the market as it was less ‘girly’ and was a low calorie drink. They successfully expanded into the same market by changing their target audience).
Growth strategies in business also include diversification, where a company will sell new products to new markets. This type of strategy can be very risky. A company will need to plan carefully when using a diversification growth strategy. Marketing research is essential because a company will need to determine if consumers in the new market will potentially like the new products.
Growth strategies in business can also include an acquisition. In acquisition, a company purchases another company to expand its operations. A small company may use this type of strategy to expand its product line and enter new markets. However, a company must know exactly what it wants to achieve when using an acquisition strategy, mainly because of the significant investment required to implement it.
For more information, please contact Neil Hughes at, firstname.lastname@example.org