Tips for Successful Growth Strategy Formulation

Hence, developing a sound growth strategy is crucial to any organization interested in expanding its business and revenues. However, growth strategies are often not very simple to design and mainly to employ. To help, here are my top tips for successfully creating a Growth Strategy Formulation plan for your business. 

Research Your Market Thoroughly

Market knowledge is at the core of developing any sound growth plan. Some of the market research activities include establishing this market growth, understanding the client needs and pains, identifying competitors, loopholes, or even areas of specialization in the market, etc. Market Knowledge will help in executing the strategy.

Set Clear Growth Objectives

Ensure that you are very specific on the growth goals you wish to set. Is it your strategy to achieve a given percentage of increase in your sales yearly? Increase market share? Should we offer the product in new geographic markets or with modifications to attract customers that do not constitute our core market? Establish growth targets for measurable, achievable Key Performance Indicators such as Sales, Revenues, Customer base, number of outlets, etc. It enhances the focus of the planning process.

Understand Key Growth Drivers

Identify the sources of competitive advantage that are both internal and external to your firm. This includes understanding what capabilities or assets can be built on, trends in the customer base that can be exploited, opportunities for partnerships or channels that can assist in expansion, etc. It is, therefore, important to ensure that the strategies fit with the major growth drivers.

Consider Multiple Growth Strategies

You mustn’t limit yourself to using only one growth model. Assess options such as market penetration, product development, regional expansion, acquisition/mergers, strategic alliances, etc. Maintain the right proportion that can contribute to the set growth target and business model.

Prioritize and Sequence Initiatives

Multiple approaches can be designed for the growth plan, targeting various product portfolios, customer groups, sales tentacles, and so on. It is then important to align and sequence these perfectly. It is advised to go for “easy targets” or to gain easier and more achievable victories before taking risky measures. Use the right mix of short, middle, and long-term strategic operations.

Create a schedule for the execution of each of the strategies with corresponding sub-goals.

When initiating strategic change, ensure that the particular steps involved are well coordinated and that responsibilities, financial resources, timelines, and other deliverables are covered. Define which targets are quantifiable and should be set at each project stage to evaluate effectiveness. Establish achievements in the goal areas of financial, customer, process improvement, etc.

Allocate Adequate Resources

The final and critical ingredients for strategy implementation are people, technology, money, and equipment. Do not overemphasize strategy growth at the expense of the actual financial plan. Strategy implementation might require funds for R&D, capital expenditures, recruiting skilled employees, acquisitions, etc. Resource needs must be consistent with the annual revenue targets or growth rates.

Communicate for Company-Wide Buy-In

Involve junior and top management employees in conveying growth objectives and strategic and tactical planning. Provide platforms for feedback. Make sure that all organizations, from top to bottom, are committed to growth plans and prepared to work accordingly. Skills, duties, and responsibilities should be amiably aligned so that employees can easily identify them with strategic goals at the organizational top-most levels.

Monitor External Trends

When growth plans are being actively executed along with the timeline to implement the growth plans, make sure to keep an eye on the external environment – economic factors, emerging technologies, new industry entrants, changing customer behavior, etc. It is advisable to be prepared to revisit strategic plans if there is a major disruption in the external environment. Build this strategic agility.

Review and Refine Regularly

Key planning: Leadership should review quarterly or half-yearly the strategies implemented to grow the business—what is beneficial and what is not—and refine plans as needed. Stick with the strategies that have the most momentum. Be willing to admit strategies that are not producing the intended outcome and change them. Reward teams accordingly.

Conclusion

Creating a comprehensive but feasible long-term plan for the organization is often challenging, time-consuming, and demanding but is one of the keys to success. Also, it is not an activity carried out for a one-time event or occasion but a constant process. Continuously monitor market cues, external drivers, data, and employee feedback to update and rebalance strategies regularly. The 5-year Growth Strategy Formulation should be lofty, but the related plans should be flexible. Adhere to the best practices mentioned in this section above, and the probability of developing a sustainable growth model will be considerably heightened.

Also read: Business Strategy