Business Growth Strategy Pdf – Despite what many people believe, a comprehensive growth strategy is not just about getting more customers and selling more products. I mean, getting customers is very important, but there is more
If you are looking for different ways to target more customers and grow your existing businesses, I recommend downloading a free copy of my book.
Business Growth Strategy Pdf
, I explain how established companies and startups are using artificial intelligence and other technologies in their sales.
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But if you’re looking for a comprehensive strategic growth plan, you’ve come to the right place, so read on.
As we explained in our business strategy principles, the first order of business for any manager is to control a core business, which means ensuring that the company’s products and services are profitable and occupy a market position.
Once you achieve that, you can shift your focus to growth and start thinking about different ways to increase the value of your business in the future.
In an ideal world, we would expect executives to only pursue growth initiatives that benefit their companies, but in reality, we’ve all seen how the pressure and misguided incentives to demand from shareholders and investors can sometimes lead a company. Continue development
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In general, we say that a development strategy is comprehensive if it fulfills a combination of the following conditions:
For that reason, you should always carefully consider the “costs” (financial and non-financial) of your development effort and how sustainable those efforts will be in the long term.
In this article, we explore the different ways you can grow any business and offer some ideas to help you create your growth plan. Some of the things we cover are:
We’ve included some charts, links, and other tips to help improve your understanding of what makes a good growth strategy. We’ve created a mind map of all the growth options we’ve covered so you can download it and take notes as you read this article.
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This mind map is a visual representation of the strategic choices you need to make as a business leader when developing a new growth strategy.
) or “free cash flow” (commonly referred to as FCF), concepts we examine in more detail in the Financial Analysis section.
Your job as a business leader is to analyze how this list relates to your organization and make informed decisions about which paths you believe will have the greatest impact on your bottom line.
The collection of paths you choose is the core of your growth strategy, which together with your strategic positioning plan and your implementation structure gives you everything you need to successfully create and execute your company’s strategy.
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While growth strategy can generally be described as a set of business initiatives aimed at increasing a company’s bottom line, I prefer to talk in terms of a management plan.
Business development, which consists of initiatives chosen by the management team to increase value in the future.
Not all growth paths have the same impact on a company, so you need to limit the universe of their efforts.
Go after the few people who produce the most impact in a period of time with the least effort and resources.
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This is why your plan for growth must be strategic in nature, because ultimately, no business has unlimited resources or management bandwidth to pursue all the opportunities that are presented, so you must carefully choose the things on which to put your attention and resources. .
This translates into a development plan that strives to do more at work, excel at it and find new ways to create value, resulting in an integrated and balanced approach to development.
I have found this categorization useful for explaining sources of growth in management meetings and making better resource allocation decisions.
But beyond the range of growth opportunities, a fundamental problem you often face is the very selection of growth initiatives that should focus on your strengths.
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The best way to start a growth plan is to assess the growth “gap” we need to fill with new businesses.
For example, let’s say you are planning your strategy for the next five years and your goal is to grow 15 percent per year. If your operating businesses are expected to generate $100 million in net revenue this year, and you expect them to grow at a rate of 9 percent per year, you can easily calculate what kind of revenue your new businesses should generate each year. .
Having a number that represents the revenue gap will help you better understand what kind of growth initiatives you should pursue.
For example, in the case above, you know that the growth strategy initiatives you choose must be able to deliver $47 million in net income by the end of five years.
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A good way to brainstorm possible initiatives to pursue is to go through each of the development paths we mentioned earlier and ask simple questions like:
Ideas that show the most potential can be further developed to get a better idea of the kind of profit they can generate, the amount of investment required, the partnerships and capabilities that need to be built, and more.
There is no one-size-fits-all approach to choosing strategic growth opportunities, as the choice must be consistent with various organizational preferences (including revenue) and meet the strategic goals of the moment.
Our recommendation is to select some of the most important investment parameters for your business (eg net income, investment needs, income, inventory preferences or strategic reasons), and then “fill the growth gap”. The best of these parameters until the gap closes.
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In an ideal scenario, you’ll end up with a balanced growth strategy across all three of McKinsey’s buckets (additions, builds, and upgrades), but in reality, you’ll often end up with a strong bias toward a particular category. The strategic goals in place at the moment are, in our experience, correct.
The next step is to work on your 5-year template, which is the subject of the next section.
The thinking is that you try to maximize the value the portfolio creates over a period of time, usually five years.
It gives you a 5-year growth template that helps you better balance efforts between different business units and make better capital allocation decisions.
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It’s always a risk to put all your eggs in one basket, and while it’s true that many companies have won big bets on new products and technologies, there’s a difference between betting “big” and betting “all” in a growth venture .
Your development effort in several markets, business units or products that may be launched at different times in the future.
By creating such a map, you can easily track all the opportunities in your pipeline and the best balance of resources in each of them.
If you can’t tell how much each initiative contributes to your company’s growth, you won’t be able to get the most out of them. You know when Peter Drucker said “
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When you understand how each business unit, product, or optimization test contributes to your company’s growth, you can double down on what works, focus on what doesn’t, and find opportunities for improvement.
, developed by Michael Treacy and Jim Sims, allows you to create a nice waterfall that shows how your revenue is distributed over a period of time, which is very useful for measuring growth efforts and reallocating resources.
We describe this tool in detail in the book, which provides a step-by-step process for creating a waterfall.
If you have enough information to allocate costs and estimate certain accounts, you can do a similar breakdown of profits or net income, but this sales report is a good starting point to understand where our profits come from.
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Attitude, you seek to maximize the strategic growth that the portfolio generates as a whole over a period of time.
This will help you better balance efforts between different business units and make better capital allocation decisions resulting in a better growth strategy.
This can be done by placing business units in a four-by-four matrix based on their competitiveness and the strategic growth potential of their markets.
Introduced at the beginning of the Boston Consulting Group (BCG), where we used competitiveness and market potential as proxies for the original dimensions.
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According to BCG’s naming convention for each quadrant, each business segment can be defined as one of:
To choose where each business fits in the matrix, its competitiveness can be assessed based on its ability to maintain a profitable position.