How Companies Grow: 5 Strategic Levers
Of all the growth - not to be confused with profit - approaches that are available to an organisation, the following are 5 tried and true approaches that, when combined, creates the balance between nurturing foundational core whilst accelerating growth and mitigating risks.
❶ Programmatic M&A - As opposed to organic or selective M&A approaches, programmatic M&A is the systematic and continuous process of acquiring and integrating new (small to medium-sized) businesses and divesting non-strategic ones. Reasons to pursue a programmatic M&A include acquiring new technologies, entering new markets, diversifying revenue streams, achieving cost synergies, or consolidating industry leadership. Companies that excel at this growth strategy include Visma and Rotork.
❷ Increase Existing Market Share - Either acquire more customers, increase customer retention, or increase customer spend. Companies that excel in this growth strategy include Coca-Cola, Grab, and Lululemon in the B2C sector; and McKinsey, Dupont, and Caterpillar in the B2B sector.
❸ Enter New Market - Either new geographic markets, demographic segments, or niche markets where existing products/services may find additional demand. Companies that excel in this growth strategy include McDonald, Zara, and AirBnB.
❹ Diversification of revenue streams - Not to be confused with #3 above. Diversification can be either related (entering industries with some synergy or connection to the existing business) or unrelated (entering entirely different industries). Amazon is a case-in-point, from an online bookstore to e-commerce (retail), to cloud computing, to digital streaming and content creation, to smart devices and technology, to pharmaceuticals and healthcare (listen to an analysis here).
❺ Innovation - This can be done at either the product/service, process, or business model level, and the nature can either be incremental (small and gradual improvement), or disruptive (completely novel and departs from existing norm). 3M, Apple, and Siemens are the most cited examples of companies that has a consistent track record of innovation.
What to read next? Try Imitation: Ignore It At Your Own Peril.
To find out how I can help you and your organisation co-create a Me-Only corporate strategy, click on the button below to connect with me.
❶ Programmatic M&A - As opposed to organic or selective M&A approaches, programmatic M&A is the systematic and continuous process of acquiring and integrating new (small to medium-sized) businesses and divesting non-strategic ones. Reasons to pursue a programmatic M&A include acquiring new technologies, entering new markets, diversifying revenue streams, achieving cost synergies, or consolidating industry leadership. Companies that excel at this growth strategy include Visma and Rotork.
❷ Increase Existing Market Share - Either acquire more customers, increase customer retention, or increase customer spend. Companies that excel in this growth strategy include Coca-Cola, Grab, and Lululemon in the B2C sector; and McKinsey, Dupont, and Caterpillar in the B2B sector.
❸ Enter New Market - Either new geographic markets, demographic segments, or niche markets where existing products/services may find additional demand. Companies that excel in this growth strategy include McDonald, Zara, and AirBnB.
❹ Diversification of revenue streams - Not to be confused with #3 above. Diversification can be either related (entering industries with some synergy or connection to the existing business) or unrelated (entering entirely different industries). Amazon is a case-in-point, from an online bookstore to e-commerce (retail), to cloud computing, to digital streaming and content creation, to smart devices and technology, to pharmaceuticals and healthcare (listen to an analysis here).
❺ Innovation - This can be done at either the product/service, process, or business model level, and the nature can either be incremental (small and gradual improvement), or disruptive (completely novel and departs from existing norm). 3M, Apple, and Siemens are the most cited examples of companies that has a consistent track record of innovation.
What to read next? Try Imitation: Ignore It At Your Own Peril.
To find out how I can help you and your organisation co-create a Me-Only corporate strategy, click on the button below to connect with me.