The purpose of a”growth strategy” is to promote growth with maximum profitability and sustainability in strategically relevant areas. As shown in Figure 1, such growth fields typically occur along three core dimensions:
Figure 1: Growth options cube with a focus on the growth dimensions “products & services” and “channels”
Different growth approaches emerge from the three core dimensions of “products & services”, “channels” and “internationalisation” . Leaving out the issue of internationalisation for the moment (please see the separate section on internationalisation strategy), we are presented with the following two main approaches to growth:
- I.) Channel & service expansion: Expansion of distribution to online channels (i.e. online marketplaces, third party e-retailers, direct sales + affiliates) generally offers substantial growth options for existing products plus the opportunity to upgrade the range of services with additional offerings (e.g. online subscriptions system, supplementary online services such as recipes, etc.). A systematic e-commerce distribution strategy is recommended to exploit existing potential.
- II.) Channel, service and product expansion: The combination of channel expansion and the marketing of existing and new products results in a nu,ber growth options. With regard to products and services, this can give rise to new, channel-specific product developments (e.g. eBooks, custom-designed sneakers, etc.). With regard to multi-channel distribution, buyer-oriented solutions such as “click & collect” can be introduced and can provide meaningful links between the company’s online and offline worlds.
In both approaches, the combination of the “products & services” and “channels” dimensions provides growth options that can sometimes offer potential for new business model development. However you choose to proceed, it is important that identified growth options are tested within a strategic framework that may or may not already exist. It is also advisable to further analyse and evaluate the options in terms of the twin dimensions of market attractiveness and internal implementation expertise. For both dimensions, further customer-specific evaluation criteria are taken into account: market volatility, growth, competitive intensity, profitability, etc. for market attractiveness and brand strength, product superiority, distribution strength, purchasing power, etc. for internal implementation expertise.
Within the framework of a growth strategy, this assessment facilitates the development of a range of growth options that can be prioritised for more detailed elaboration by means of available resources. The prioritised growth options should then be transferred to a growth roadmap before being moved into the systematic implementation phase by a project management office.
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Markus Fost, MBA, is an expert in e-commerce, online business models and digital transformation, with broad experience in the fields of strategy, organisation, corporate finance and operational restructuring.Learn more