The most common growth strategy is to focus on what you do best by emphasizing your current products in your current markets. This strategy is also called the concentrated growth strategy because you’re thoroughly developing and exploiting your knowledge and expertise in a specific market with known products.
How do you grow if you’re doing what you’re already doing now? Here’s how:
- Increase present customers’ rate of use: You achieve this goal by
- Increasing the size of purchase
- Maximizing the rate of product obsolescence
- Finding new uses for your product
- Advertising other uses
- Offering incentives for increased use
- Attracting your competitors’ customers: You lure customers away from your competitors by establishing differentiation between yourself and them, increasing advertising efforts, or cutting your prices. Look at Chapter 5 to find ways to differentiate yourself from other companies.
- Attract nonusers to buy your products: This process can be done by offering trial uses of your products, adjusting the price up or down, and promoting other uses to attract these customers (check out the following Example icon for details).
- Expanding Geographically: When you’re thinking about expanding, first think about where you want to cultivate new business. You have options: other regions, nationally, or internationally. Geographical expansion works well for a company that wants to expand its service territory because it needs a physical location to serve its customers. Many of the big boys of business, including McDonalds, Wal-Mart, and Home Depot, have exported their operations to other countries. On a smaller scale, many microbreweries have opened up new locations in various metro areas and airports in the United States as a way to expand their geographical reach.