In a previous post we discussed using a simple matrix to evaluate growth strategies; you can read it here. In this post we will examine the four options and compare them. To do this we will use the following parameters:
· Overview discussion
· Difficulty
· Risk
· Impact to the business
To refresh, the four growth strategies to be examined are:
· Current Product, Current Market
· Current Product, New Market
· New Product, Current Market
· New Product, New Market
In this entry we will focus on the first on the list.
Current Product, Current Market
Overview: this strategy is really all about tuning the current business to improve revenue and margin. To do this the company has to take a deep examination of what they are doing right and what they are doing wrong. Companies that engage in the Current Product, Current Market approach often look at the following:
· Provide greater value for the customer: value to the customer allows for price increases while at the same time strengthening the bond with customers.
· Bundle Products and Services, unbundle pricing: by delivering products, services, maintenance, support, consulting or other ancillary services in a package with a given price the business can grow revenue from existing customers and attract new ones in the same market
· Streamline and lower costs: look for opportunities to reduce overhead or fixed costs; find and exploit economies of scale and better leverage existing assets.
· Investing in new and better Sales and Marketing strategies: increase recognition, acquire new customers
Difficulty: The main source of difficulty is inertia; trying to offer the same products to the same market without doing everything in the same way using the same strategy. It takes the development of a good strategy and the discipline to enact it to make Current Product, Current Market a success.
Risk: this is a lower risk strategy as it does not require product innovation or penetration into a new market.
Impact to the business: Current Product, Current Market is a lower impact strategy. Its focus is mostly on increasing and recognizing efficiencies in the business in order to gain new revenue and greater margin without requiring product development or marketing penetration. It is one of the most common strategies as it is less risky and puts less of a burden on the company.
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