One of the frameworks you may want to use for growing your business in one way or another is the Ansoff Matrix, and it is designed to simplify the complex.
In the last article we gave some thought on how to analyse your business and the environment. Now you need to consider how to grow and develop your business as this will form a large part of your marketing strategy.
Ansoff Growth Matrix
Say you want to sell more of what you already offer, the same kind of buyers, but more of them, and you know this is a low risk. You apply your Marketing Mix, by adjusting your price or changing your packaging, to attract more customers.
Product development looks at expanding your current range for the same target customer. You need to invest in R&D, put time aside to work on them and allocate budget for developing and marketing these. This is a medium risk.
Looking for new customers or a new market is when you’d think about collaborating with competitors, talk to your suppliers or build a strategic partnership with someone who’s already doing well in that marketplace. Think about what your strategic aims will look like.
The highest risk is selling new products to new customers, because there are so many unknown quantities. That doesn’t mean you shouldn’t do it, because that’s how most businesses launch!
The next step is to make your mind up on what you’re planning to do and which direction you’re going to take the business in. This is an exciting time, because you’ve got clarity and energy to work on your idea. Don’t forget, this is the time when you know what you’re not going to do or waste time on unnecessary activities. It’s a much more efficient way of running your business.
Know what your long-term objectives are to grow and develop your business, even if it takes you a few months to get ready and make a start. It’s time well spent, though, because you’ll find the time you put into strategy development will save you time later and stop you being diverted.
Here is just one way of looking at a competitive marketing strategy, although there are a number of different ways to do it:
These are some of the things you can consider doing. If you’re thinking about increasing market share or diversifying, this is about growing your business, so you need a “build” strategy. You’ll be investing in marketing and promotion, product development and possibly R&D.
You may also be thinking about expanding your team, although not everyone wants to do this. A lot of businesses are designed to employ the person who founded them and to exist as a sole trader only. 80% of the UK economy is generated by SMEs.
A hold strategy comes when you’re in a competitive space or the economy took a nosedive, like in 2009 and 2010, when most business owners just wanted to get their heads down and get through to the end of the recession. You may also be in a declining marketplace, such as a manufacturer of camera film. This could then be a niche strategy.
A niche strategy could be helpful in a competitive marketplace where your skills could allow you to become the specialist and known for being different. The market will be small, and requires a lot of customer insight and segmentation work. You will create products and services which only you can provide.
Harvest is where you’ve been doing something for a number of years and there are still a few people who’ll pay for it. It may not be setting the world alight and seem like boring, bread and butter work, but you’d be a fool to stop doing it.
For example, for an accountant you may have someone turning up with a shoebox full of receipts and an Excel spreadsheet. You might hate doing it, but you know these people will come back every year, and pay you for the service.
Finally, divesting is about looking at products and services that have had their day and now is time to get rid of them (see the Boston Matrix). This could also include a business or a business unit, and getting rid of any of these things frees up capital to invest elsewhere in the business.
Now that we’ve looked at some frameworks to use to establish how to grow and develop your business, next time we look at how to choose the marketing tactics to get you there.
Are you worried your marketing isn’t working right now?
If leads and enquiries are drying up, you’re not attracting the right customers or you’re not making enough profit – it’s time to investigate.
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