How do you establish a market penetration strategy?
Every business faces the existential threat of competitors. Patent filings, market dominance, and even financial resources can’t shield them from this inevitability. So, what lessons can we take from companies that have endured and even prospered for centuries despite the fierce competition?
There are methods companies use for implementing a successful growth strategy. Some of the most common growth strategies in business include:
1. Market penetration
Organizations generally use a market penetration strategy when deciding to market existing products within the same market they have been using. In other words, businesses try to grow using existing products in order to increase their market share (the percentage that a company has of the total sales for a particular product or service).Continue reading
2. Product development or diversification
There can be a number of reasons for an organization to consider a market expansion strategy. Competition can be so strong and overwhelming that it makes it impossible to grow within the current market. A business must find new markets for its products, otherwise, it cannot increase its profits.
New applications or features in a product can also aid in the business growth strategy. A product’s growth strategy works well when technology starts to change and evolve. Thus, it becomes imperative for organizations to leverage the emergence of ubiquitous connectivity, the inexorable rise of Artificial Intelligence, and the rising importance of managerial creativity.
Though product development can place within the already existing market, diversification implies that you can sell new products to new markets to increase your business growth. This route is riskier and relies heavily on market and consumer research to ensure the product’s desirability, feasibility, and viability.
3. Acquisition
A business growth strategy can also include the acquisition of another company as a way of expanding its operations. For example, Disney purchased Pixar, Marvel, Lucasfilm and, most recently, 20th Century Fox. The first three acquisitions alone have earned the company more than $33.8 billion.
In this case, the products and markets are already established. A company must know exactly what its corporate goals are because such an acquisition strategy demands a significant investment to implement.