For a company to expand continuously in its market segment, it is necessary to develop a strategy for business growth that will allow scaling and reaching a new level of income. And although not all companies want to grow rapidly, business managers are focused on growth. Business expansion contributes to securing and maintaining a competitive advantage and building a strong market position.
Ways to Achieve Growth in Business
Careful planning at the start, development of a strategy, search for financial and human resources. The more time you spend at the start, the higher your chances. It is critical to understand which of these stages is most valuable in your particular case and work it out in as much detail as possible. Many businesspersons consider the proposals that come to them for weeks. During this time, they calculate the possible profit and loss. If the result of the calculations did not correspond to their internal norm, they refuse offers. We advise you to take this method into service because time is a valuable resource and it is best to convert it into money. Also, be able to delegate tasks. This is also a risk. However, this method allows you to prevent burnout and look at the work of the company from the outside. You will be able to notice problems and errors and quickly adjust the development strategy.
What does success depend on?
The field of activity that you have chosen is of paramount importance. Each person is endowed with his own abilities that allow him to solve problems. And if the abilities are correctly identified, then choosing a direction will be easy. So, success is inevitable. An interesting fact: scientists from Harvard University found that success in business is not related to mental abilities and finances. A big role here is played by the ability of the human brain to withstand failure. We can conclude that the key to success lies in the ability not to give up on the first problems and take responsibility.
Factors affecting business growth
- Characteristics and purchasing power of the target market. When a company enters a market niche, that has its own unique and relatively stable nature, it is more difficult to achieve sustainable growth rates. If a product or service can be expanded regionally, the company is more likely to grow at a high rate.
- Benefits of globalization. The positive value of globalization can hardly be overestimated: the opportunities for the company’s growth are immeasurably multiplied, all aspects of its development are more fully taken into account, and conditions for harmonization are created. In addition, the globalization of the world economy creates a serious basis for solving business processes.
- The nature of the market. Entering a market dominated by big companies is not a major impediment to a company’s growth. Even a small company, if it is well managed, can achieve growth in its products or services at a truly competitive price (as long as quality standards are met), because a small company has no indirect costs and the management staff is as high as big companies are. In addition, entering a traditional industry with an innovative product in a specific niche can provide innovative growth rates.
- Degree of product innovation. In some industries, such as IT, innovation is indispensable, so offering only an innovative product is not enough. In industries with a high level of innovation, rapid growth can be driven by innovation and faster growth than the competition. In contrast, in a stable industry that offers products that can be considered commodities, entering with an innovative product or process will bring a strong competitive advantage.
- Status of intellectual property rights. For a new business, intellectual property rights (patents, copyrights, trademarks, trade secrets) can be a competitive advantage because there is a period that can be used when no one else has copied the product. But it is unwise to rely on these rights, so it is necessary to develop a marketing plan that will ensure the company has a strong market position before someone tries the product and sells it on the market.
- Industry volatility. Some branches are inherently unstable and therefore difficult to predict accurately what will happen in the future (generally, there are especially high opportunities in the telecommunications industry, but the risk of failure is especially high due to company volatility).
- Entry barriers. In some industries, it is challenging to enter and achieve a market share that can be profitable. Other affiliates simply ban new companies due to very high costs. In some industries where there are no strong barriers, a company may raise its barriers to slow the entry of competing companies.
Without a doubt, these seven factors will not make anyone an experienced businessman. However, they will help novice entrepreneurs to understand the main mistakes that can harm at the very stage of the company’s formation.