Company Growth Strategy Examples

By | March 29, 2023

Company Growth Strategy Examples – For many, a holistic growth strategy isn’t just about getting customers and selling more stuff. Finding customers is important, but it’s more than that

If you are looking for information on different ways to target more customers and expand your existing business, I encourage you to download a free copy of my book.

Company Growth Strategy Examples

Company Growth Strategy Examples

, where I explain how established companies and startups are using artificial intelligence and other technologies in their sales efforts.

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But if you’re looking for a comprehensive strategic growth plan, you’ve come to the right page, so read on.

As we explain in our principles of business strategy, the first priority in any manager’s business is to control the core business, which is to ensure that his company’s products and services are profitable and profitable, while maintaining a position in the market.

Once you have achieved this, you can focus on growth and start thinking about different ways to increase the value of your company in the near future.

In an ideal world, we expect leaders to create growth initiatives that only benefit their organizations, but in reality, we’ve all seen how pressure from shareholders and investors and the wrong incentives can sometimes lead to this. strive for growth

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In general, we say that a growth strategy is comprehensive if it meets the following conditions:

Therefore, you should always carefully examine the “costs” (both financial and non-financial) of your growth efforts and how sustainable those efforts are in the long run.

In this article, we’ll explore the different ways to grow any business and give you some ideas to help you plan your growth. These are some of the things we consider:

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Company Growth Strategy Examples

We’ve included some charts, links, and other references to help you understand what a good growth strategy is. We’ve also created a mind map with all the growth scenarios for you to download and take notes as you go through this article.

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This mind map represents the strategic choices a business manager must make when developing a new growth strategy.

) or “free cash flow” (commonly referred to simply as FCF) is discussed in more detail in our Financial Analysis section.

As a business leader, it’s your job to examine how this list relates to your organization and make informed decisions about which opportunities will have the greatest impact on your bottom line.

The set of paths you choose, along with your strategic positioning plan and execution system, is the core of your growth strategy, giving you everything you need to create and execute your organization’s strategy.

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A growth strategy can generally be defined as a group of business initiatives aimed at increasing a company’s profitability, but I prefer to talk about a company’s execution plan.

Organizational growth, which includes management initiatives to increase value in the near future.

Not all growth journeys will have the same impact on the business, so you need to narrow the scope of these initiatives.

Company Growth Strategy Examples

Look for the things that will have the most impact over a period of time with the least amount of effort and resources.

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That’s why your growth plan needs to be strategic, because ultimately, no business has unlimited resources or management leverage to take advantage of all the opportunities available to them, so you need to choose your focus carefully. .

This is reflected in a growth plan that focuses on doing more of what works, doing it better and finding new ways to create value, creating a synergistic and balanced approach to growth.

I have also found this classification useful in management meetings for clarifying sources of growth and making better decisions about resource allocation.

But beyond identifying opportunities for growth, a more important issue you often face is choosing which growth initiatives should focus on your strengths.

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The best way to start a growth plan is to assess the growth “gaps” we need to fill with new businesses.

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For example, let’s say you plan your strategy for the next five years and set a target of 15 percent annual growth. If your existing business is expected to generate $100 million in net income this year and you expect it to grow 9 percent annually, you can easily calculate how much revenue your new business will need to generate each year. .

Having numbers to define revenue gaps will help you better understand what growth initiatives you should pursue.

Company Growth Strategy Examples

For example, in the above case, the strategic growth initiatives you have chosen should generate a net profit of $47 million by the end of 5 years, which will help you prioritize and facilitate their selection.

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A good way to take the initiative is to go through all the previously mentioned growth paths and ask the following simple questions.

The ideas that show the most potential can then be developed to better understand what profits can be made, the level of investment required, the potential for partnership and creation, etc.

There is no perfect way to choose strategic growth opportunities, as the choice must be consistent with the company’s choice of options (including returns) and strategic goals at the time.

Our recommendation is to choose the most important parameters of your company’s investment (for example, net profit, required investment, yield, inventory advantages or simply for strategic reasons) and then “fill the growth gap” with initiatives that you are committed to implementing. . the best in terms of these parameters until the gap is removed.

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Ideally, you’ll have a growth strategy that balances all three McKinsey buckets (expansions, creations, and optimizations), but in reality you’ll probably have a strong bias toward certain categories. Our current strategic goals reflect our experience.

The next step is to work on your 5-year model, which is the subject of the next section.

A mindset where you try to maximize the value your portfolio creates over a period of time, usually five years.

Company Growth Strategy Examples

This gives you a 5-year growth model that helps you better balance the efforts of different business units and make better capital allocation decisions.

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Putting all your eggs in one basket is always risky, and it’s true that many companies have made big bets on new products and technologies, but there’s a difference between a “big” bet on growth initiatives and an “everything” bet.

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Growth initiatives that involve multiple markets, business units or products that may be launched at different times in the future.

By creating a map like this, you can easily keep track of all the options in front of you and better balance resources between them.

If you can’t communicate how much each effort contributes to the growth of your business, you won’t get the most out of them. You know what Peter Drucker said.

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By understanding how each business unit, product, or optimization experiment contributes to your company’s growth, you can double down on what works, focus on what doesn’t, and look for ways to improve.

, created by Michael Treacy and Jim Sims, allows you to create a nice waterfall that shows how your revenue breaks down over time, which is very useful for measuring growth efforts and reallocating resources.

We describe this tool in detail in our book and provide a step-by-step process for creating a waterfall.

Company Growth Strategy Examples

If you have enough information to break down costs and break down some accounts, you can do a similar breakdown of profit or net profit, but this sales report can give you a good starting point to understand where our profits come from.

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A mindset that aims to maximize the strategic growth generated by the portfolio as a whole over a period of time.

This helps to better balance the efforts of different business units, make better capital allocation decisions and improve growth strategies.

You can do this by placing business units in a four by four matrix based on their competitiveness and strategic growth potential in their respective markets.

First introduced by the Boston Consulting Group (BCG) and we use competitiveness and market potential as key metrics.

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Following the BCG quadrant naming convention, we can identify each business unit as one of them.

To choose where each company fits into the matrix, you can assess its competitiveness based on whether it can defend its profitable position.

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