So, you made it through the first couple of years of business ownership and are now ready to focus on growing your enterprise. If they want to raise revenues and attract new clients, successful business executives know they need to grow their company. There are numerous approaches to this, each with its own set of difficulties and dangers. Your company's needs and your appetite for risk will determine which options are best for you.
The Ansoff Matrix proposes four distinct paths to corporate expansion, each with its own associated degree of peril. Because you are already familiar with both your items and your target market, penetrating the market is the safest strategy. It takes little in the way of investigation or risk, but increasing sales to a particularly exciting consumer, acquiring new customers in these markets, or expanding your offering of exciting products could help your firm expand. There's no guarantee that everyone will find the same success that Walmart and Costco have had by lowering prices to compete with rivals. Apple's current market is the target of intense marketing campaigns designed to increase iPhone and iPad sales. Penetration of new markets is Apple's second most resource-intensive growth strategy, per the Panmore Institute.
Apple's primary business strategy is the creation of new goods and models, which in turn increases the company's profit margins. Since it's impossible to predict how the market will react to a new product, developing it carries a higher degree of risk. Understanding what the customer wants is crucial, as is coming up with novel solutions. In 2013, Coca-Cola introduced Coke Light, a low-calorie and sugar-free variant. Coca-Cola discontinued it a few years later, citing the need to streamline product offerings in light of the success of Diet Coke and Coke Zero.
The threat grows as the market expands. If you're looking for success, consider expanding your horizons internationally. As a matter of fact, the sheer variety of worldwide possibilities can be overwhelming. Canada, Mexico, Europe, and Japan are just a few of the obvious global marketplaces. From Apple and Coke to Volkswagen and McDonald's, nearly every major corporation has expanded internationally. Threats emerge from pursuing too many chances at once and from the fluctuations in currencies. To ensure success with this tactic, you'll need to do extensive study into the target market to see how cultural factors might affect sales. U.K. grocery chain Tesco made an unsuccessful foray into the U.S. market. Instead of picking up a ready-made dinner from the supermarket, it was more enticing to order takeout or cook a meal from scratch.
Growing your market doesn't have to mean going worldwide; it could mean opening a second location just 100 miles away, or expanding your reach through e-commerce and postal services. Regardless of the path you choose, efficiency in operation is essential. The demands of your new clientele must be met without sacrificing quality. This includes not only hiring the correct people, but also making sure production can keep up with the demand.
Out of the four options, diversification carries the highest degree of danger. It's a leap into the unknown to introduce new items to an unfamiliar market, with little hope of benefiting from prior experience. Samsung Electronics is an electronics giant that had its origins in areas other than smartphones and TVs, including sugar refining, textiles, banking, and insurance. Since then, they've branched out into other areas, such as building ships and apartments and producing weapons.
It is possible to fail even if you have done something like this before. As demonstrated by Virgin's decision to take on the world's largest beverage company, it's important to choose your battles carefully.
Despite the obvious risks, growth, both internally and externally, requires venturing into unfamiliar territory. Innovation and advancement are fostered, and job prospects are expanded, as a result. The significance of words like "improvement," "achievement," and "success" is lost without a commitment to ongoing change and development, as Benjamin Franklin put it.
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