This necessitates a thorough evaluation of a business to get a clear picture of its strengths, weaknesses, opportunities and threats (SWOT). This will provide important insights into the type of growth strategy that best suits the business for the immediate and long-term future.
INTERNAL GROWTH
- Are there ways in which you can improve the efficiency of the business?
- The use of a system of statistical process control will show if your processes are working correctly.
- Could the quality of the product or service be improved?
- Adopting a system of Total Quality Management (TQM) may effect a change to your end product.
- Are costs as competitive as they can be?
- If these checks are carried out successfully, then it is reasonable to expect that the business will grow by its organic growth. This will make the business more competitive.
The first thing to establish is whether you can increase your share of the market. To do this, you would have to take customers from your competitors or attract new customers. You have to understand your customer base and that of your competitors.
CUSTOMERS
Who are your existing customers?
Are there any that you ahve not yet targeted?
Are there any that no longer do business with you? Why?
Do any of them buy from your competitors? Why?
Do they have instant, alternative choices?
COMPETITORS
What are their strengths? Can you match them?
Have you lost customers to them?
What do they do better than you do?
OURSELVES
What is our sustainable competitive advantage?
What do we do that is better than our competitors?
What is our unique selling point?
How will growth affect our pricing, marketing and service levels?
Before increasing output by increasing the capacity of your processes, you need to ensure that there will be a market for your proposed additional producsts. Many companies have increased output in the anticipation that the market will follow, only to find that there is a downturn or that a competitor has already improved performance.
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