Examples of Growth Strategies
Example #1: Overcoming a Prohibitive Cost of Production
Company Strengths:
- Technical excellence
- Openness to trying almost anything
- Acceptance that failure is part of success
Company Weaknesses:
- Limited resources
- Facility too small to be competitive
GROWTH STRATEGY:
The company used its core technology to develop a new value proposition and used it in its existing market and to enter new markets. Instead of competing on products and price, it became a pilot and research-for-a-fee facility for larger producers and their customers. This strategy built on the company's willingness to try new things and the technical caliber of its employees. Customers largely absorbed the risk of failure since the company provided R&D services, getting around the company's limited resources.
Example # 2: Growth Outside a Shrinking Core Market
Company Strengths:
- Technical depth on core technology
- Global presence
Company Weaknesses:
- Business very focused on a single shrinking market
- No product is transferable as is to another market
GROWTH STRATEGY:
This supplier developed a growth strategy that took them out of their core market. They used their strength to develop a new product from their existing core technology and took it in a new vertical where it would deliver a superior and new value proposition. This new opportunity balanced their shrinking core market.
Example #3: Double Digit Growth with High Production Costs
Company Strength:
- Applied research
Company Weakness:
- Highest cost in the industry
GROWTH STRATEGY:
The company used its strengths to create new value propositions through new uses of its products while at the same time entering new vertical markets. The value provided to the new customers was high and justified price premiums of up to 100%. Since the new applications were protected by patents, the company was able to maintain its price premium, even though its products were commodities. It also consistently achieved double digit growth.
Example #4: Growing by Expanding the Market for Services
Company Strength:
- Specialized know-how and facilities
Company Weakness:
- Service could only be used if specified by customers' engineers at the product design stage
- Expensive service
GROWTH STRATEGY:
This service company determined that to control its growth, it needed to design products that use its production method. The company used the understanding of its core technology to select products where the technology delivered exceptional value. It went from offering only manufacturing services to offering new products in a new vertical market.
Example #5: Rebirth after a Market Collapse
Company Strength:
- A versatile and non-specialized workforce
Company Weaknesses:
- Total focus on one market
- No transferable products to another market
- Very limited resources
GROWTH STRATEGY:
The company entered a new vertical by licensing technology and offering it through its non-specialized workforce. That was the only option that fit its limited budget, could deliver revenue promptly and would provide the company with a competitive advantage. Within a few years, the company made up for the decrease in Sales caused by its core market collapse.
Example #6: New Product Categories Leverage Great Brand
Company Strengths:
- Great reputation in its core market
- Strong Sales Channel
- Great at New Product Development
Company Weaknesses:
- Maxed out on market share in its product category
- Mostly focused on domestic market
GROWTH STRATEGY:
The company added new product categories for its core market to be sold through its existing Sales Channel and separately entered new verticals, creating product line extensions for them as it grew to understand these markets.