Growth strategies 

Having a strategy for growth is a key document for all businesses. 

Before you plan your strategy for the future, we strongly advise that you review your external environment and evaluate your business in terms of its products, customers, staff, resources, systems and results. Without this the business has little information to develop a strategy for the future. Our business review page will guide you through how to do this.

Reviewing business page

When deciding on your growth strategy there are several options that you might like to consider depending on your circumstances. It may be that your growth will come from just one strategy or a combination of different strategies.

There are several ways of growing your business; below we will explain four key scenarios. These are based on a widely used business model called Ansoff which you may have heard of. Growing your business will inevitably require an investment (financial and time wise) and will potentially have an impact on your resources. We strongly recommend that you consider this when thinking about your strategy options and also develop a financial plan.

Market Penetration – Put simply this is where you achieve growth through increasing your market share by selling more to your existing customer base. Are you able to sell your customers different products (to those that they already buy from you)? Are you able to increase their average spend with you? Is there a different purpose for using your product/service? Do you have customers that have stopped buying from you – if so, do you know why? Can you win them back?

Product Development – As the name suggests this is where you achieve growth from developing and launching new products and/or services. Whilst the development of new products and services is the lifeblood of a company, the costs associated with such activity can be costly. You need to ensure that you will receive return on your investment and that you are fully up to speed with what your competitors are doing. You need to make sure that your product/service is different or better than your competitors – it must have a unique selling proposition. It is also important that your new products/services meet your customers’ needs. Conducting market research and speaking to your existing customers will help you to identify these.

Market Development – This is where you sell your existing products/services to new markets. Can you identify new markets that you haven’t targeted before? Are there new ways of communicating to these customers to encourage them to buy from you? Are there different ways (distribution channels) of selling your product/service to these customers? It is important to bear in mind that your new markets may be generated through exporting your product/service. When looking at market development you should also look at whether pricing to suit different segments of the market would be beneficial and also whether you need to make changes to your product/service offering to broaden the market.

Diversification – This is where you pursue both new products and new markets to secure growth which isn’t necessarily available in the other scenarios. If you are considering diversifying, it is important that you consider whether you have the appropriate resources and funds in place and whether there is sufficient demand to ensure return on your investment.

Mission Statement
Once you have decided on a strategy, you can write a mission statement for your business. The mission statement outlines why the business is open for business and covers key areas such as the purpose of the business; its basic strategy; its policies and standards of behaviour; and the values and culture of the business.

Vision Statement
This is where you set out your vision for the future of your business, perhaps over a 1-5 year period. Vision statements usually follow the SMART model (meaning that the statement is Specific, Measurable, Achievable, Relevant and Time bound). An example is “being the leading service provider of X by 2013 in Jersey.”

When writing your strategy, we recommend you carefully consider what your business needs to work towards in order to achieve its strategic goals. These are called critical success factors (or abbreviated to CSFs). They relate to the resources and competences of the business but also the competitive environment in which your business trades. It is also key when setting your mission, goals and objectives that you bear in mind your stakeholders (anyone with a vested interest in your business). You need to ensure minimal conflict of interest and maximum buy-in.

Setting targets
A successful business plan and growth strategy should include a set of targets which allows everyone within the business to understand what needs to be achieved, by when and by whom. It is important that your targets are Specific, Measurable, Achievable, Realistic and Timely (SMART). Targets can be set for a variety of business areas including customers (retention, numbers, spend per head); staff (absence rates, retention, % completing training programmes), customer service (service delivery times, number of complaints) and financial (number of sales, turnover, profit, % reduction in costs). Targets are worthless if business performance is not measured on a regular basis. Our measuring performance page will guide you through how to do this.

Measuring performance page