7 Strategic Ways To Grow Your Business
Updated: Mar 27
1. Geography - Open more stores
The underlying assumption with the geographic growth strategy is that proximity to your customers matters. For example, proximity is a non-factor for e-commerce businesses, whereas it matters a ton for food establishments and retailers selling big-ticket items. Here are a few examples of the geographic growth strategy executed well:
2. Products and Services - More wallet share
To deploy this strategy successfully, you have to be certain that your existing customers can afford the add-on(s) AND that your bundled offering savings them time, money, or effort. Here are some examples:
Shameless plug, Financial GPS runs this play with our unbundled bookkeeping, tax, payroll, and analytics service. Customers can add and subtract services based on their needs.
Remember Comcast Triple Play? Comcast offers internet, cable, and telecommunications services to millions of subscribers. The additional services drives revenue per customer metrics up and brings attrition rates down because of increase switching cost.
3. Customer Scale - Divide and conquer the market
Brand building is an expensive and arduous task, but if you can do it, you've got 80% of what it takes to execute the customer scale strategy. At its core, customer scaling involves two things - first, build a supply chain that can deliver the product or services at a high rate of efficiency. Secondly, build brands (that leverages a single supply chain) to reach different customer tiers. Let me explain with a few examples:
Toyota owns Lexus. Toyota is the mass market brand, Lexus is the luxury brand, but its the same company under the hood. Both brands leverage the Just-In-Time (JIT) manufacturing system documented in the popular business book, "Toyota Way" by Jeffrey Liker.
Gap owns the Old Navy (low end) and Banana Republic (high end).
Aldi's owns Trader Joes.
4. Channels - Reach More Customers
What's the easiest way to sell your product to the most people possible? Direct to consumer online? Retail? Wholesale? Each outlet is called a channel, and you want to start with the one that gives you to highest exposure, at the high profit margins, with the least amount of friction as possible.
Everlane was a popular online clothing store that made a name for itself by offer designer cloths at less than designer prices. The CEO Michael Preysman was quoted saying,"Everlane will never open a brick and mortar location." Then on Dec 02 2017, Everlane opened its first location in SOHO. "Our customers tell us all the time that they want to touch a product before they buy it," Preysman said. "We realized we need to have stores if we're going to grow on a national and global scale." Adding the retail, brick and mortar channel turned out to be the best path to growth.
Amazon purchased Wholes for $13.4 Billion --giving the largest e-Commerce company in America physical outposts in hundreds of neighborhoods across the country.
5. Verticals - Industry by Industry.
Every entrepreneur should read "Crossing the Chasm" by Geoffrey Moore. In short, the book implores entrepreneurs to hyper focus on one specific industry (vertical). Hyper focusing allows you to master a specific customer problem, which enhances your marketing capabilities 10x, and it makes you more referable.
Subsplash specializes in making mobile apps for churches. They only service churches. This allows them to build a back-end that knows all of the Idiosyncrasies about church culture, key decision-makers, and pain points. In order to grow by verticals, Subsplash can make apps for universities (as a example).
TOMS made it big with its buy-one give-one business model. For every pair of shoes that the company sells, it gives a pair to some in need. TOMS used the same model to sell coffee.
6. Mergers and Acquisitions - Buy up companies.
Buy them or bury them!
Amazon, the everything store, bought diapers.com, Zappos.com, Audible, Ring, Twitch etc.
T-Mobile purchased MetroPCS for $1.5 Billion to enter the low-end of the market.
7. Horizontal Integration - end to end
Think about the supply chain. Somebody sources the material, somebody refines it, and another person turns it into a product and sells it. Raw materials turn into parts, parts turn into products, and products get sold. It's that simple. If the retailer believes that the supplies has leverage, then they should buy the supplier. Own them and hedge the risk.
1. Disney bought Pixel (makers of Nemo, ToyStory, the Incredibles) for $7.4 Billion.
2. IKEA buys forests in Alabama and Romania for the wood supply. 1% of the world's commercial wood supply is used by IKEA.