It may seem easy to just think of wanting to expand your business but it takes more than just wanting things to happen. Statistics have shown that only a small percentage of businesses may really afford to do an expansion because of lack of resources. That is why, it is best to start small and stay as it is until the business is really ready to venture into something big.
In order for a business to thrive, is to be able to lay out a growth strategy that brings out good results with minimal risks and effort. To have a better hold of all of these, develop a strategy that is workable and will provide you with a result that can make you take the next level. Never be in a hurry to go all the way up as you may miss out certain important points that could lead to the crumbling of your business.
1. Intensive Growth through Market Penetration
Have you noticed how some products are now being sold in bulk, like the beer in cans or toilet paper? They were used to be sold individually until companies have pushed themselves into making the market buy their products in bulk because they know that these are products are things that consumers are likely to buy more than one product at a time. Another way of how to market penetration is by providing several other ways for a certain product to be used. Example, we have gotten used to the thought that baking soda is used for baking. But now, it is also sold as a refrigerator deodorizer, used as one of the ingredients in making toothpaste, can be used to treat insect bites and itchy skin by making it into a paste, etc.
2. Intensive Growth through Market Development
This simply means selling your products and services to people outside your locality like in another city or another state. With this strategy, to consider having another branch may be the best solution on how you may be able to reach out to more people. Some companies have had their business franchised. This is actually a good move when the company may not have enough resources to build their own and instead have others help them to expand the business through franchising.
3. Alternative Means
More than selling through a physical store, you may also want to consider selling your products or services online. This is one of the very common methods on how businesses have expanded. The internet is able to reach out more people than just relying on walk-in customers since the internet can be accessed 24/7, customers may be able to purchase what they want anytime, anywhere with just a few clicks.
4. Product Enhancement
Businesses should be able to come up with new products that can easily be patronized by existing customers. This means, developing products that are not far from what you are already selling and which your existing customers are more likely to buy.
5. Introducing New Products for New Customers (Target Market)
After running the business for some time, a business may feel the need to introduce new products that would cater a different set of people to widen your target market. That is how some companies have different kinds of products to offer because they would not want to be stuck with just one kind of customer. Expanding the business through adding in new products will definitely increase the chances of letting the business grow.
Taking any of those strategies pose some risks which you should come out prepared. Just remember to take one step at a time rather than drag the business into a place where the risk may be bigger than the actual opportunity of keeping the business.
Back in the 1950’s, diversification was a growth strategy that some companies have tried to embrace. Diversification in business means that a company acquires another company that is unrelated to their kind of business. Some of the largest conglomerates in the Philippines are:
1. SM Investment Corporation
We have known SM in retail merchandising for 30 years. But now they have ventured into shopping mall management and development, financial services via Banco de Oro, tourism through SM Land Inc, hotels through SM hotels and SM Hypermarket, and SaveMore stores. Their total market capitalization as of 2010 amounted to about Php330 Billion.
The success of SM Management Corporation was not done overnight. It took them years and with careful steps on how they could be able to expand their company that more people would trust.
2. Ayala Corporation
This is one of the oldest companies in the Philippines that has interest in real estate through Ayala Land; financial services through Bank of the Philippine Islands and telecommunications through Globe Telecom, Inc., to name a few.
3. San Miguel Corporation
They were formerly very well-known to be involved in food, beverage and packaging company. But now they have ventured in power distribution via Meralco; oil-refining and retail via Petron; telecommunications via Liberty Telecom; mining via Daguma-Agro-Minerals, Inc. and banking via Bank of Commerce.
All of the successful companies now have gone through the same difficulties as would any small business have had. But it is through having a good business plan integrated with workable growth strategies that are carefully initiated, having the right people to trust in making the plans work out and in investing with the right kind of products that have made them what they are today.