Every startup kicks off with a unique idea or product. However, it takes a brilliant startup growth strategy to sustain in the market and ensure that the business concept reaches the masses. While some startups manage to stay afloat, there are others who have harder battles to fight. A research conducted by IBM Institute for Business Value and Oxford Economics revealed that 90% of Indian startups fail within the first five years due to lack of innovation.
So, what can your startup growth strategy be to avoid this situation?
The solution to growing a company successfully is straightforward:
- Identify the growth-hampering factor
- Give the necessary impetus
- Develop a robust growth strategy framework to accelerate growth.
- To plan the best route for your company, you need to develop a foolproof actionable strategy that would support your company’s vision, align with the market requirement, and bring results with the least amount of effort and risk.
However, for this to be beneficial, you need to align your company with foolproof strategies. Here’s a look at some strategies startups can utilise:
Market penetration: Increasing the success rate
Market penetration is the absolute and most viable option for small businesses looking to grow and expand their reach. To achieve it, you need to increase the company’s market share.
To achieve market penetration, promote existing products or services in the same market at a lower price to gain a competitive edge than your other business counterparts.
For instance, Sam Walton used this strategy while setting up the first Walmart store. During that time, there were other retail stores in the market, but what skyrocketed Walmart’s business was a simple marketing strategy – he was able to offer the items at much lower retail costs than its competitors. This strategy works best where there is no scope of new products in the market with very little differentiation.
Startups can harness different methodologies to attract new clients. Promotional offers like special discounts, events and similar plans will not only help retain existing customers but also attract new customers and open new avenues of business.
Market Development or Expansion: Exploring new markets
Market development is another crucial growth strategy that budding startups should employ. Formulate a market development or expansion plan to sell your current product to an adjacent market. When your startup faces stringent competition, start looking for broader market domains to explore and promote your products or services.
Additionally, even a reassessment of a product may uncover its new use, which can increase its reach. For example, a product created for health purposes can be found useful as a skincare product too. It implies the manufacturer can do business beyond the health market. However, it can fan out into other markets, ultimately increasing its sales and eventually, market share.
In this particular situation, the product isn’t new, but the market is. In this ‘market’, the company will be able to gain market share, increase sales, and make profits.
Having said that, you need to employ prudent measures when using market development as a growth strategy. Since it involves plunging into a new market, conduct thorough research on the market and its customer base.
Alternative Channels: Marketing Products Innovatively
The Internet has opened up endless marketing opportunities for businesses to reach their customers and sell their products. It is this powerful tool that will help us open new growth trajectories, all the while improving the company’s overall market share and presence.
For example, when Apple opened its retail shop, it simultaneously worked on tapping its customers through the Internet. It is this alternative channel strategy that helped the company achieve a new client base.
A startup should harness the Internet as a means for customers to access its products or services, or foster a rental model, subscription programs, or sell aggressively through mobile apps.
Product Development Strategy: Launching new products
The phrase ‘product development‘ implies that there is no new market, but there is a new product, which, when introduced to the market will churn out significant profits.
The product development strategy is fostered in industries with fast-paced technological advancements. The electronics or mobile industry is one great example of innovative models to the market to keep up with the competition. As a startup, you should apply this strategy to develop new products and add or update features to scale up a business.
Mergers and Acquisitions: Fuelling Growth
Acquisition is a significant business growth strategy that a company can use to expand its business reach. This strategy amps up the growth of the company and allows it to secure a large market share and derive revenue.
Usually, nascent startups are believed to have a hard time making acquisitions, owing to the amount that will be required to cover the price tag.
Nevertheless, it would be wrong to rule out acquisition as a growth strategy, just because the company is small. Acquisition empowers a small business to establish a dominant position in the market, expand its boundaries, and offer its service or product to a wider range of customers.
By definition, a start-up is meant to grow. But for that, you need meticulous planning, tenacity, and a talented and dedicated team. The best way to do all these things efficiently is to follow a growth strategy where you plan, commit, track results, and raise the required working capital, to drive the growth of your startup.
Today, with alternative forms of lending like invoice discounting, startups have gained an edge and increased their chances to grow and expand their business. With the availability of working capital, startups now can focus on their operation expenses, thus aiding to their growth plan. KredX is one such company that helps startups get quick access to working capital using their unpaid invoices.
The 5 elements mentioned above are critical to creating a robust business growth strategy. Applying these strategies successfully can provide your company with the much-needed boost in a market dominated by behemoths.
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