A business grows faster on the back of sound business strategies. Growth will occur when:
a) A business can maintain a sustained competitive edge over its competitors
b) It recognizes customers’ needs, responds to them, and keeps repeating this cycle over and over again.
c) It pre-empts customer requirements and pro-actively meets them.
d) It can build trust with their customers
You will see that many fast-growing businesses like Airbnb, Tesla, for instance, have put in place the right strategies. These have enabled them to grow at a fast pace.
There are many businesses, especially the new-age businesses, that are growing fast but are not profitable. It is many times a function of strategic choice made by the company. The sustained growth that the enterprise is achieving indicates that it has the right business strategy in place.
Profitability comes when a sustained cost reduction supports customers’ willingness to pay for its goods and services. The gap between willingness to pay, price, and cost has to be created to generate profits.
Business strategies are complex and must be understood and appreciated for companies to leverage their power for sustained growth and profitability.