Business growth strategies

Could you observe a flower? If you do not nurture it, the flower will wither. Conversely, if you cultivate it, that flower will grow.

Business like a flower. If you do not manage it correctly, your business will start wither and die. On the other hand, if you maintain it perfectly, it will grow.

Growing a business is a big challenge. Business growth is not only gaining short-term profit and then stop, but the ideal situation is taking your business grow and sustainable.

One of business growth strategies is dominating the market ( market penetration ), especially if you want to focus on organic growth. For your information, you can grow your business through several approach, such as: alliances tactic, mergers program, and acquisitions approach.

So if you focus on organic growth, you can obtain it by running market distribution program properly.

You can develop and implement market penetration approach to create one of your roadmap  for business growth.

In this article, I just show you information about market penetration strategies to scale up and extend your business.

Market entry strategies and samples

Penetrate a new market is a must, especially if you find that your current market has saturated. Therefore you have to know what is the best way to entry to the new market or build new market and then create revenues from here.

In many firms, the most common programs for entering new market are: do a market analysis , risk analysis, competition analysis, revenue potential review,and finally decide formal decision whether is feasible or not to enter the new market.

There are new market type that you can try to penetrate to, the types are:

1. Enter the new market segmentation.

a. Currently providing to particular demographic segment or market, and you will try to enter different demographic market segment, for example:

Currently you serve your solution to male, age range from 18 to 25 years old. Now, your team make an innovation, so you can deliver your solution to male, and age range from 30 to 45 years old.

b. Currently you deliver your product locally, and you decide to extend your business and distribute your product globally ( international market ).

This type is used for the same product ( with some improvement ) or product substitution so that you can extend your market.

2. Enter new market with new product or service.

This type is used when your R&D personnel found new product to be delivered to different market.

Example of basic step entering international market

1. Raise your awareness of international business opportunities by doing some international market opportunity research.

Research what product or service which are needed by your targeted international market. Review your competitive advantages and value added product or service that you can deliver to them.

2. Study the risk of international business.

Research your key competitor who has already export their product to international market, what is their strategy, which country do they target, how much amount do we have to spend for expansion to international market, how about the RoI ( return on investment ), can we pursue this opportunity, does it have an impact to local market, study and examine the potential market to entry, etc.

3. Find out where to get correct market information.

4. Find out the regulation, government rules, and things related to this.

5. Discover your international business partner and how to contact them.

6. Learn cultural differences, consumer behavior, language, customs, etc.

7. Evaluate your internal resources.

Examine your personnel ability to make an approach and initial communication with different behavior, different culture and language.

Review your financial statement and condition, estimate the money required, is it feasible to expand the market globally.

8. Finally, develop an international marketing method and implement it to market your product globally.

For example: you can choose and make a partnership with particular company ( trading company ) who does export your product ( indirect exporting ) or direct exporting ( you export the product directly ).

Now, I will continue on the main subject market penetration strategy. Feel free to read more for obtaining more detail.

Market penetration strategies basic explanation

Market penetration means the number consumers who buy a particular product in a certain period, divided by the amount of market population. This formula explains how to calculate market penetration.

Actions that can be carried out to penetrate the market:

1. Price penetration program.

One of the program is price adjustment. One of the tactics is decrease the price. As a consequence, your margin will reduce. So, thing to concern is, you can perform this strategy only to the market that has been already saturated.

In addition to this, you can do this program especially to the market that has very high competition. The goal of this program is make your brand more attractive to the consumer, so your product is more appeal and bought by them. In other words, this program will generate more sales.

If you want to keep your cash healthy. You should raise your margin for your product that will be delivered to the different market segment. The requirements to run this program are:

a. You have to make sure that the market size is big.

b. You have to make sure that the market is not oversupplied.

c. You have to make sure that it has less competition.



2. Content marketing.

Try hard to create outstanding content, so that it will be a viral content. If you do not have human resources for creating this content, try to look for content producer specialist.

Once you have this content, spread it via your all marketing channel, especially social media site channel.

The main goal from implementing this action is obtaining virality, or you can say it “word of mouth marketing”.

Word of mouth marketing is very effective way to penetrate the new market.

Things must be concerned are:

a. You must produce an outstanding product.

This product must be match with your target market needs or wants.

b. Develop a good message that match with your target audience.

c. Select appropriate channel to deliver the message.

Once you done, you can focus on the activities to make your message viral and spread to your new target audience.


3. Do not be alone, make a relationship.

If you found it is hard enough to penetrate your target market. You should think alternative strategy, getting partnership with others.

There is one famous example with this relationship strategy, I will show you below.

a. Partnership between Intel and PC manufacturer ( for example HP, IBM, etc ).

It is called co-marketing program. The idea is like this, Intel and PC manufacturer has agreed with co-marketing agreement. So, in every PC, there is Intel inside sticker. This make some benefits for Intel, because the brand is reach to PC consumers when they buy the PC.

Meanwhile, Intel will do a campaign to spread the message that the PC manufacturer is powerful PC because it utilize the good processor.

Both of them get beneficial, we call it win-win solution. This is the essence of co-marketing.

Summary

There are more tactics and basic theory for penetrating the new market for growing your company.

But, in this article I have explained the strategy you can implement, they are: price adjustment strategy, content marketing strategy, and make co-marketing agreement with your business partner.

I will write more strategies for increasing your business growth later. Stay tuned and keep reading this blog, thanks for reading this blog.