Grow your business

Grow your business

Business growth is multi-faceted, and achieving sustained business growth varies with the company’s challenges and impediments. Solutions are customized specifically to a company. Let me expand on this with examples.

Business growth through strategic sourcing

One of my clients, a mid-sized American in the food business, generated an annual revenue of a billion dollars. It was facing a challenge of low and stagnating growth. 

We looked at the business operations model of the company. We understood the problem could be resolved by re-designing its ingredient sourcing operations. The corporation was sourcing raw materials in semi-processed form from multiple parts of the world – India, Honduras, and the US. 

A detailed ingredient supply chain analysis was undertaken. Sourcing operations from the farm to the factory across sourcing locations in India and America were studied. The analysis revealed that substantial efficiency gains would accrue to the company if it sourced raw materials from India. The new ingredient sourcing operating model recommendations resulted in the company making annual cost reductions of $ 25 million in ingredients alone.

The operational strategy change resulted in improved shop floor efficiency. The additional gain realization was achieved by making ingredients available during winter when the factory operated on warehouse-stored raw materials. 

Internal limitations to growth 

We tried to help the client further by analyzing the company’s organizational model. Still, we could not make headway because of the leadership issues and its unwillingness to address challenges faced by its unit heads. The leadership, in this case, was more inclined to buy growth through the acquisition route. 

Our learning from the above example is summarized as follows:

  1. Company margins were quickly improved by strategically changing its ingredients sourcing operations. Structural operational changes resulted in efficiency gain and improved margins.
  2. The company needed more leadership to achieve more gains. It would be a good practice if operational leadership was supported by active boards and mentors who could offer strategic advice and guidance.
  3. Another lesson from the above case study is that you cannot grow your business by putting more dollars into marketing alone. An additional focus on marketing was not the best option for this company. 

Business Growth by Acquisitions

There have been cases of business analysis of client companies that reveal that growth could also be quickly obtained through acquisitions. Identifying a suitable company can lead to achieving exponential growth. Acquiring companies to gain market share, expand the market base, and grow is popular among US businesses. 

Here are a few examples from the literature:

  1. Facebook: Facebook has made several high-profile acquisitions, including Instagram, WhatsApp, and Oculus VR. These acquisitions have allowed Facebook to expand its reach and capabilities and helped the company stay ahead of its competitors.
  2. Google: Google has also made many strategic acquisitions, including YouTube, Android, and Nest. These acquisitions have helped Google to expand its product portfolio and to diversify its revenue streams.
  3. Amazon: Amazon has used acquisitions to grow its e-commerce empire and to expand into new markets. For example, Amazon’s acquisition of Whole Foods helped the company to enter the grocery market. Its acquisition of PillPack helped it to enter the healthcare industry.
  4. Microsoft: Microsoft has used acquisitions to strengthen its software industry position and expand into new areas. For example, Microsoft’s acquisition of LinkedIn helped it to enter the social networking market. Acquiring GitHub helped it strengthen its presence in the developer community.
  5. Disney: Disney has used acquisitions to expand its entertainment empire and diversify its offerings. For example, Disney’s acquisition of Pixar helped it to establish itself as a leader in the animation industry. In contrast, its acquisition of Marvel enabled it to enter the superhero movie market.

Generic business growth outline

A typical grow my business strategy from theory can be described to contain the following sections: 

Customer Profiling: A comprehensive profile of the customer demographics and barriers preventing the customer from buying the product should be documented. We use secondary research and primary survey-based data.

Market sizing: There are two approaches to market sizing - bottom-up and top-down. I prefer the bottom-up approach because the sizing estimates are more accurate. The bottom-up approach starting point is authentic industry statistics on sales and growth in the product segment of your choice. 

Growth strategies: These target the customer. Strategies should be tested in a pilot and then rolled out. Marketing plans are integrated into the growth strategies. As digitalization occurs across business segments and businesses, digital marketing is an increasingly popular strategy supporting business growth models.  

Growth is company-specific, and solutions are customized to individual corporate needs.

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