If you are a marketer, it is highly understandable that growth is a slow and challenging process. You may always be stuck between the client request and the struggle of controlling the parameters for a SaaS startup. A smart and efficient growth strategy is required to serve the purpose. Before entering into the dynamics of the marketing strategies, one must have a clear understanding of the growth strategies.

What is a Business Growth Strategy?

Growth strategy for a company is a plan to manage the current and future situations to achieve the goal of expansion and generate profit.
In 1957, Igor Ansoff, one of the pioneers of strategic management planning, developed a matrix identifying the four strategies for business growth. The article was published in Harward business review under the title “Strategies for diversification”.

The model contained a very strategic approach for the overall growth of the organization considering both financial and administrative aspects. In his 2X2 matrix, he suggests the four sections representing different strategies for growth.

Market Penetration Strategy

Introduction to market penetration strategy

The market penetration strategy was a simple and pre-existing way of conducting the business. In this strategy, you focus on selling your existing products to your existing markets to increase your profit and market share.

What kind of firm uses the strategy?

A firm that believes in maintain ing loyalty in their pre-existing clients and improving the existing products in the market can rely on this one. Here it is essential to convert non-users to users and convert the consumers in the current line-up.

Implementing market penetration strategy

With considerably lower risk, the strategy aims to develop a distribution network, attracting new clients and upgrading market communication methods. For example, if a company is selling instant noodles and the taglines descripts “ Not a snack anymore”, this clears the intention to expand in the usage of the products.

How can it undermine the risk factor in the place of use?

Clever Pricing and loyalty programs are found to be highly effective in maintaining the existing client base. The risk factor is undermined here, as the market and the product both are highly reliable. Investments in this firm are highly efficient as they work on an existing system.

Product Development Strategy

Introduction to product development strategy

If a firm is selling new products in an existing market, it is pursuing a product development strategy. The strategy focuses on creating a client base for the new product launch in the market. The product must have added features to sustain in the market.

What kind of firm uses this strategy?

A firm that is open for extension in its product line can follow this approach. For instance, if you look at Google, it is brilliantly managing its pre-existing products in the market, but it is also expanding its horizon by entering various sectors.

Implementing market development strategy

With a moderate risk factor, the strategy offers the firm to be more creative and extensive in approach. A new product is riskier as it needs a new assembly for creation as well as a better marketing strategy, but it can yield unexpectedly brilliant results. Risk and proper management play a crucial role here.

How can it undermine the risk factor in the place of use?

Researching the requirements of the clients, finding ways to improve the functionality of the product and working on a unique addition can help a product find the right place in the market. Conducting proper research can help undermine the risk factor involved with development of a product.

Market Development Strategy

Introduction to market development strategy

The approach to increase the sales by launching existing products or services in a new market, is a market development strategy. Expanding into a new market carries a bundle of risk with it.

What kind of firm uses this strategy?

A firm that is looking forward to expanding in another geographic location is most likely to carry this strategy. A lot of research and analysis is required to successfully carry out this one.

Implementing market development strategy

It is important to learn about the local competitions, people’s requirements, peculiarities of the outlet and distribution network. Creating product awareness and developing a proper network is highly profitable. A few modifications have to be made in the service as per the demand of the local audience.

For example,If a food outlet is to be opened in a new place where the people are not likely to eat non-vegetarian food, the firm has to change the menu a little to adjust it according to the demand.

How can it undermine the risk factor in the place of use?

The risk factor is high here as a new competitor, but it provides an opportunity to expand the approach of the firm. Here the return on investment can be slow, but once the local people grant it acceptance, it may expand quickly.

Diversification Strategy

Introduction to diversification strategy

Diversification strategy is the business growth method through which a firm can expand the business developing new products and launching them in new markets.

What kind of firm uses this strategy?

A Firm that focuses on developing a new market for a new product, is pursuing a diversification strategy. This seems to be creating an entirely new business and carries the same amount of financial and administrative burden as a new business.

Implementing diversification strategy

Being the riskiest approach to business growth, successful implementation of this strategy requires a deep research of the market. While developing a new product or a new market, the requirements of the targeted clients must be acknowledged.

How can it undermine the risk factor in place of use?
Being the riskiest approach, this strategy is often worked under partnerships to mitigate the risk. The firm can enter a completely unexplored place in terms of business, but with patience, ROI can be generated and it may flourish further.

To ensure success in the business, the firm management has to analyze all the factors embracing all the long and short term impacts. The firm management is responsible for establishing any strategic decision to create a model that imbibes all the interfaces of the organization.