There are various ways of scaling your business. This needs planning.
Scaling can either be organic or non-organic. Organic would mean you are growing in the normal course of your business while non-organic would require more complex strategies.
Ansoff developed a matrix which gives four ways of market expansion:
- Market Penetration: This is pushing existing products to an existing market. This should ideally be adopted as the first approach and can be done through:
- Increasing the product use through the introduction of incentives such as loyalty points
- Increasing the quantity of product used through bundling or making package size bigger
- Finding new applications for current users
- Attracting new customers through marketing and referrals
- Launching a new marketing campaign
- Not so much but buying a competitor enterprise perhaps
- Product Development: this is pushing new products to the existing market. Product development, depending on what you sell might take a longer time. However, there are a few facets to this:
- Add new features and refinements such as a high-resolution camera to a mobile phone
- Expanding product lines such as adding flavors to current options. Think Coca Cola!
- Not so much but develop a new generation product. Think long-life milk!
- Develop a completely new product
Remember, the closer your products/ services are related to one another, the more likely they are to succeed in your current market.
Also, there is a benefit of cross-selling
- Market Development: this is pushing existing products to a new market. This can be done as the third of the four strategies as it is further difficult.
- Target new customers in the same geographic location
- Expand into a new location. This, however, will need a lot more study and time, especially if you are thinking of expanding to a place you are not entirely familiar with such as market-related forces, resources, cultural issues, legalities, etc. There’s professional help available should you need, and it is necessary that you take it. The government also has several support programs in case you are looking at this option.
- Also, did you think online shopping as yet? That could be a good way to by-pass the complexities but still reach out to the bigger global market.
- Diversification: This is pushing new products to new market. This, as experts will tell you is the highest-risk option and thus, a detailed risk assessment is necessary. There are usually two types of diversification:
- Related: such as Disney now taking over Marvel comics or
- Unrelated: such as GE which has a whole range of unrelated product and service offerings