If you know that expansion is on the horizon, but you’re not sure exactly which of the common growth strategies will best suit the forward direction of your business, we can help.
When assessing your requirements and opportunities, the team here at Dartcell will often use the principles of the Ansell growth matrix to help you decide on the most sensible (and profitable) way of taking your venture to the next level.
The Ansell model is based on four main growth strategies. Here’s a little more information on each of them.
1. Market penetration
As the name suggests, penetration involves increasing product and/or service sales amongst your existing customer base, and therefore achieving a greater share of your market. It often relies on improving your proposition; steering customers away from your competitors; making your prices or your offering(s) more attractive; or a combination of all three. In some cases, you can also strengthen your standing by acquiring or merging with one of your rivals.
2. Market development
This strategy involves taking your existing products or services to new, and perhaps untapped, markets. It’s often based on identifying and targeting new customer segments or entering a new region or country. As you can imagine, good research is key to successful market development; you need to understand the demand for your offering(s) amongst your potential new customer base(s).
3. Product development
Product development relies on developing and launching new products or services to the same market. It’s an excellent customer retention strategy, as it encourages upselling and cross-selling, which in turn can increase customer satisfaction and loyalty to your business. As with market development, before you assign funding to your new venture, you will need to conduct thorough reviews of your targeted customer base(s) to ensure the want and need for these new products or services is there.
4. Diversification
Perhaps the riskiest strategy of them all, diversification involves launching new products and/or services to completely new markets. It requires comprehensive research and extensive marketing, not to mention the backing of a strong brand and a clear vision.
Diversification as a strategy can be divided into four further categories: horizontal diversification, vertical diversification, concentric diversification, and conglomerate diversification.
Our finance directors excel in helping our clients understand and identify the best growth strategies for their circumstances. To explore the strategies listed here in more detail and get advice on which approach might work best for your business, contact us today.