Bookmark and Share

Growth Strategies

Watch us on Twitter

Not getting this information sent to you directly? Sign up for your FREE monthly Smartmanager newsletter today.   Sign up now!  

-------------------------------------------------------------

What Executives Need to Know About Growth Strategies

The coming economic recovery brings both opportunity and risk for all businesses, large and small. C-level executives, faced with developing “new and improved” growth strategies—that work, can sometimes become overwhelmed with options.

Necessity of Growth Strategies After Recession

Traumatic recessions, like the one that gripped the U.S.—and the world—from 2007 to 2009, force most organizations to “contract” and adopt short-term survival strategies. Much like injured athletes who cannot play and must work hard to keep non-injured body parts ready for returning to the active roster, businesses should try to keep their operations fine-tuned while recessionary conditions exist.

As a recovery looms on the horizon, growth strategies become not a priority but a necessity, particularly for smaller businesses. While Fortune 100 companies may have the liquid resources and proven strategies that allow them to “flip the switch” and attack the recovery at full speed, smaller organizations often need some information and suggestions to best evaluate their options for a successful growth strategy.

Should senior management need further convincing of this necessity, they need only consider that their competition is also working diligently to develop similar successful growth strategies to expand, capturing new customers and generating new revenues. C-level executives, to keep pace, whether pro-active (preferred) or reactive (better than non-active), must carefully consider the key components of all growth strategies to tailor action plans that project success for their company and situation.

Growth Strategy Key Options

“One size fits all” seldom creates a winning growth strategy. However, the four key options of all growth strategies are the best starting points for senior management to design action plans that might work for their organizations. Consider the following key components when designing your recovery growth strategy.

  • Diversification. Develop new products and/or add new markets. Understand that this is the highest risk approach, but offers the potentially highest reward. Because this focus mandates “exploring new territory,” C-level executives should consider this strategy suggestion carefully. Basing a growth strategy on this component tends to work best if your company is inherently innovative. Knowing that your company has a high innovation-quotient can lower your risk element from high to reasonable. Also, innovative companies often offer senior management more clear ideas for growth strategy details.

  • Market development. Use your existing products, but attack new markets. Employing your current product mix while forging into new markets creates growth strategies that typically work well. For example, your company has a historically successful product menu, but to date has concentrated on one region or only domestic (U.S.) markets. Analyze other regions or countries to identify new markets that exhibit characteristics that project new revenue opportunities, without the necessity of high investment in research and development or financial commitments for new, unproven products. You might opt for different product packaging or distribution channels to penetrate new markets, domestic or international.

  • Product development. Create new products for your existing top markets. Senior executives who know their markets and customer base intimately can benefit from focusing on the product development key component. Like a photographic negative, this component is a reverse image of the market development focus. Swapping components (product instead of market) can reach the same goals and objectives via a different, but equally effective method. This basis for a growth strategy is often more “comfortable” for C-level executives and Boards of Directors.

  • Market penetration. Maximize your existing products and markets to earn a higher share of your customer (current and prospective) base. Companies facing high uncertainty when considering new products or unproven markets typically use stronger market penetration as the basis for their growth strategy. Committing to a “do what you know” philosophy can be quite successful if senior management has high level creativity and self-confidence. You know your products, your markets, and your competition. Using this knowledge, this growth strategy might drive your company to achieve a higher percentage of current market share and create a competitive edge through pricing initiatives, expanded marketing, or innovative distribution methods.


Identifying and considering the core components of all growth strategies can help senior executives better focus as they develop the necessary growth strategy(s) to succeed in the coming recovery. While the strategies that worked during the “hot” economy of the early 21st century may or may not work during this recovery, senior management should consider the wisdom of employing proven strategies or creating new, innovative action plans.