My clients and readers often ask how I can grow my business and put my company on a sustained business growth path. Let me share some of my experiences with clients. I have supported this model with principles of management theory and examples available in the public domain. I have created a sustained business growth model based on forty years of professional experience. You will find it on the home page of my website.
Business growth is multi-faceted, and achieving sustained business growth varies with the company’s challenges and impediments. Solutions are customized specifically to a company. Let me explain this with examples. One of my clients, a mid-sized American in the food business, generated an annual revenue of a billion dollars. It was facing a challenge of low and stagnating growth.
We looked at the business operations model of the company and understood that the problem could be resolved by re-designing its ingredient sourcing model. The corporation was sourcing raw materials in semi-processed form from multiple parts of the world – India, Honduras, and the US. A detailed ingredient supply chain from farm to factory across sourcing locations in India and America revealed that substantial efficiency gains would accrue to the company if it sourced raw materials from India. The ingredient sourcing recommendations resulted in the company making annual cost reductions of $ 25 million in ingredients alone. The operational strategy change further resulted in improved shop floor efficiency gain realization by making ingredients available during winter when the factory operated on warehouse-stored ingredients.
We tried to help the client further by analyzing the company’s organizational model. Still, we could not make headway because of the leadership issues and its unwillingness to address challenges faced by its unit heads. The leadership, in this case, was more inclined to buy growth through the acquisition route.
We learn from the brief above that:
- Company margins could be quickly improved by strategically changing its sourcing. It resulted in sustained business growth for many years to come.
- The company is limited by leadership to achieve more gains.
- Another lesson from the above case study is that I cannot grow my business by putting more dollars into marketing alone.
- The solutions are more likely to be internal to the company. The limiting factor to growth often lies in leadership, which I repeatedly found in my experience with various clients. The analysis reveals that a business strategy and business model review can help grow my business. It is difficult to achieve, for it requires leadership to be open to questioning themselves and looking for answers within.
There have been cases of business analysis of client companies that revealed that growth could be quickly obtained through acquisitions. Identifying a suitable company led to the company achieving exponential growth. Acquiring companies to achieve rapid corporate growth is a popular strategy in the US. Here are a few examples from literature:
- Facebook: Facebook has made several high-profile acquisitions, including Instagram, WhatsApp, and Oculus VR. These acquisitions have allowed Facebook to expand its reach and capabilities and helped the company stay ahead of its competitors.
- Google: Google has also made many strategic acquisitions, including YouTube, Android, and Nest. These acquisitions have helped Google to expand its product portfolio and to diversify its revenue streams.
- Amazon: Amazon has used acquisitions to grow its e-commerce empire and to expand into new markets. For example, Amazon’s acquisition of Whole Foods helped the company to enter the grocery market, while its acquisition of PillPack helped it to enter the healthcare industry.
- Microsoft: Microsoft has used acquisitions to strengthen its software industry position and expand into new areas. For example, Microsoft’s acquisition of LinkedIn helped it to enter the social networking market, while its acquisition of GitHub helped it to strengthen its presence in the developer community.
- Disney: Disney has used acquisitions to expand its entertainment empire and diversify its offerings. For example, Disney’s acquisition of Pixar helped it to establish itself as a leader in the animation industry. In contrast, its acquisition of Marvel helped it to enter the superhero movie market.
A typical grow my business strategy from theory will look something like this:
Look at the target customer profile when designing a business portfolio. A comprehensive profile of the customer demographics and barriers preventing the customer from buying the product you intend to bring to the market should be documented. Customer profiling is done systematically. We use secondary research and primary survey-based data. We then tabulate the profile data and average the results. It helps us generate profiles of your major customer segments. For instance, you can use data from your buyers on Shopify to build customer profiles. Customer profile data is readily available on this and other e-commerce platforms.
The next step is to size the market. There are two approaches to market sizing. There is a bottom-up and top-down approach. I prefer the bottom-up approach because the sizing estimates are more accurate. The bottom-up approach starting point is authentic industry statistics on sales and growth in the product segment of your choice.
Once you have the target customer profiles ready and have a good estimate of the available market size, you can begin designing your growth strategies. Let me share the growth model I follow for developing and implementing standard typical boilerplate model-based growth strategies
But as I have shared from a real-life case study above, a grow my business strategy should be custom-built and will be specific to a company.
At the base of a typical business growth model sits the business strategy. The business model drives the business strategy. A business model, in turn, is driven by the marketing strategy, which is implemented with the help of marketing tools. Many people believe that growth is achieved through marketing. Marketing alone does not lead to sustained growth; it combines business strategy, business model, and marketing strategy. I see a lot of job portals seeking to hire business development professionals – freelance or full time and expecting them to generate leads and bring in growth. Such efforts will rarely succeed in growing my business.
As digitalization occurs across business segments and businesses, digital marketing is an increasingly popular strategy supporting business growth models. Digital marketing includes customer profiling, segmentation, and various tools and strategies to help move the customer down the marketing funnel. These are popular modes of communication a corporate body offerings customers. But these are not the panacea and a solution to growing my business. Business growth is achieved through painstaking efficiency gain processes uncovered in your company’s business strategy, business models, and operational models.
Professional certification for business growth: