BUSINES ENVIRONMENT

UNIT – 2
Economic environment with reference to india’s economy :

GROWTH STRATEGY :
Companies may implement various growth strategies to help their teams increase productivity and
meet their objectives. Utilizing these methods can allow a business to improve its efficiency and
overall profitability. Understanding these strategies can help organizations plan and integrate
processes that drive expansion into alternative markets and increase revenue.

What is Growth Strategy ?

A growth strategy is a detailed outline that lists the actions businesses plan to take to expand
operations, increase revenue and boost market reach. With a growth strategy, an organization
evaluates its financial, market and industry positions to establish clear objectives that help the
business develop over time. A strategy for growth can require different departments and teams to
work together to further the company's goals. As an action plan, your growth strategy can include
the following components:

• Goal: Define what the company hopes to achieve with a growth strategy.
• People: Outline who is involved in the project.
• Product: Consider whether the company has positioned a product to help achieve its goal.
• Tactics: Identify the steps the company can take to reach its goal.

Examples of growth strategy goals include increasing market share and revenue, acquiring assets
and improving the organization's products or services. The growth strategy your employer
implements may include aspects such as:

• Investing in new software

• Conducting market research
• Adding new locations
• Hiring new employees
• Lowering the cost of a product
5 tips for developing an effective growth strategy

When planning and initiating a business growth strategy, consider

the following tips for developing it effectively:

• Use a growth strategy template: Consider using a free online template

to outline your intended organizational growth process. This can help
you integrate all the required elements into the strategy you develop to
help the business grow and succeed.
• Establish value: Determine what sets your business apart from the
competition. You can outline what value the company's products and
services bring to customers and why individuals may want to choose the
company over other retailers or organizations in the market.
• Define customer markets: Determine who your ideal customers are and
whether these individuals already purchase goods and services from the
company. Then, you can consider how to better address their desires,
requests and priorities.
• Analyze competitors: Perform an analysis of your competitors to find
out what they do that works, doesn't work and how they reach the same
market. You can use this information to develop a growth strategy that
integrates effective methods for the company's competitors.
• Determine where revenue comes from: Identify all the company's
current revenue streams and look for ways to add more opportunities to
earn revenue. For example, a new product or service offering could be
one way to add new revenue streams.
• Monitor performance: Effective strategies typically require key
performance indicators (KPIs) that allow you to evaluate what aspects of
your strategies are effective and which aren't. This information is crucial
for managing marketing costs and staying within the project's scope.
 10 Growth Strategies

The following growth strategies can help your business organize, plan and implement various
processes that drive sales, increase profits and help widen your customer market:

1. Market expansion: A market expansion strategy can be an effective approach to

business growth. This strategy involves a company selling its products or services to a
new market. A business may use market expansion as a strategy if there is little room for
growth in its industry among its competitors or if the company finds new uses for its
products within different markets. For example, a software company may expand its
market from IT and technology consumers to education, health care and other market
sector.

2. Market segmentation: Market segmentation is another type of growth strategy

that divides the customer market into smaller groups, also called segments, according to
various criteria, including customer interests, locations, ages or professions. A business
might implement market segmentation as a growth strategy for developing campaigns
that are directly targeted to each segment. For example, a clothing retailer might use
market segmentation to create segments based on age and then create targeted
campaigns for age-appropriate clothing.

3. Market penetration: Market penetration is another marketing growth strategy

that businesses can use to increase their revenue. This strategy operates by marketing a
company's existing products or services to its current market. This increases the
company's market share, which is the percentage of the dollar and product sales it holds
within its market compared to its competitors. To implement market penetration, a
company might lower its product or service prices, especially if there is little distinction
between its products. This can increase its market share by attracting more repetitive
sales.

4. Product expansion: Businesses also use strategies regarding the products they
develop and sell to support growth and increase profits. Product expansion is one such
strategy where a company can expand its product line or redesign products to increase
sales and revenue. For example, a technology company can employ product expansion
strategies when new technology emerges or older forms become outdated.
5. Diversification: Diversification is a business growth strategy that involves an
organization developing and selling new products to new customer markets. It can
be a challenging strategy to implement since it may involve extensive product and
consumer research. However, with the proper market analysis and research, a
company can become quite successful through innovative approaches to appealing
to a wider range of customers.

6. Forward acquisition: Businesses may also use acquisitions and mergers as a

means of growth and profitability. A forward acquisition is a growth strategy that
involves buying component businesses that are essentially a part of a company's
distribution chain. For example, a major food grocer might use a forward acquisition
to buy up additional properties to convert to its grocer brand. This enables
companies to move competition out of the way while enabling more accessibility for
customer markets.

7. Horizontal acquisition: A horizontal acquisition is similar in principle to a

forward acquisition because it consists of buying another company or organization.
However, a horizontal acquisition enables companies to buy competing businesses
that add to business growth and development. This strategy also serves companies
by eliminating competition and increasing market share.

8. Backward acquisition: Along with the forward and horizontal acquisition

strategies, a backward acquisition is an integrative business growth strategy that
involves a company buying one of its suppliers to better control its supply chain. This
is an effective growth strategy because it allows businesses to develop and launch
new products more quickly and for fewer costs. For example, an automobile parts
supply company might undergo a backward acquisition to acquire a business that
manufactures the parts it sells. This would then allow the parts business to offer
custom-made parts to bigger customers.

9. New partnerships: Businesses and organizations can also increase revenue

and achieve growth by forming new partnerships with similar businesses that offer
similar products and services. This can be highly effective for:
• Increasing resources
• Boosting staff
• Acquiring diverse talent
• Gaining access to essential equipment or technology
Another benefit of this business growth strategy is that the organizations that form the
partnership gain exposure to each other's customer markets, ultimately increasing sales and
revenue.

10. Viral loop strategy: The viral loop strategy is a growth strategy that
involves several processes to be successful. When a company implements a viral
loop strategy, it may include these steps:
• First, customers must try the company's products or services.
• Then, the company offers incentives for its customers to share the products or their
services with their networks.
• These new customers then purchase the company's products or services, try them and
Dr. mani sahani
also refer others to try the company's products or services.
• This cycle repeats consistently and works assistant Professor
by increasing the number of customers who
purchase from the company.