New opportunities are critical to the success of any business venture. New business opportunities can come in form of innovative marketing technologies, new services and products offered by other marketing agencies which can be similar or more complex to the existing ones.
Growth in revenue and profitability is the goal of most businesses. In order for you to achieve your desired growth targets in revenue and profitability, your business or company must first of all have a clear growth strategy and strong infrastructure for its execution.
There are two forms of growth strategy you as an entrepreneur can adopt in order to expand your business;
INTERNAL GROWTH STRATEGY
This involves effects or strategies that you can adopt as for the internal expansion of your business. Internal growth strategies are growth plans which you intend to effect for growth within your company. Such strategies include; development of new or improved products for its current markets, increasing sales of an existing product or service (This starts with advertising), Improving an existing product or service by enhancing its quality and making it more convenient to use, and geographical expansion, that is expanding the original location of your business to other places. This makes your products or services closer and easily available to people in different locations.
EXTERNAL GROWTH STRATEGY
This growth strategy is adopted by entrepreneurs who intend to grow and increase their business capacities in relation to other similar enterprises. External growth strategy can be the coming together of two or more companies in order to form a better improved business organization with a new name. Merging your company with another will help you have better competitive stamina and more advantage of survival in the business world. Many businesses have blossom through this means. You and other entrepreneurs who have decided to merge your respective businesses will benefit much more due to the joint resources and man power. This also helps you improve your entrepreneurial experience as well.
This however might not be favourable to the employees as some of them will have to be dismissed if their services will not be needed in the newly formed company.
Another form of external growth strategy involves acquiring another company which can be similar or even different. You do this by purchasing an already established company alongside its assets and personnel. The acquired company is merged with your own company to form a new improved and stronger business organization that still retains your company name.
Acquiring another company fulfils several of your company’s needs ranging from expanded geographical reach, increase in products line, better competitive advantage as well as strong economic stamina.
However, before you decide either to merge your company or acquire a new one, you have to consider the competitive rate of your product.
Merging and acquisition of companies sometimes lead to monopoly whereby your company becomes the only supplier of a particular commodity. In as much as this is favourable, you should not forget that your ultimate goal as an entrepreneur is to satisfy the consumer needs. Making the consumer a priority is very important in the growth of your business.
Most entrepreneurs in a monopoly market structure tend to relax since there is no more competition. They increase the market prices which in the long run reduces consumer surplus.
Oligopoly is also similar to monopoly. It is a market structure whereby there are few sellers or suppliers of a product in the market.
Note that as an entrepreneur, whichever step you want to take as regards the growth of your business, you must first of all weigh the pros and cons of such step. If it will warrant a situation you might not be capable of dealing with, then maybe you should give it time until you are sure that you are ready. However, if you feel the benefit of your business decision outweighs the risk, then go ahead. Business is all about taking risks after all. By knowing what works for you and what does not, you grow in experience and better able to compete in the business world.
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If you have any questions or business challenges, do not hesitate to contact me so we can crack it together!