Today we’re going to give you 3 deplorable key strategies for overcoming growth plateaus. Isn’t it extremely frustrating when you just can’t figure out why your business is stuck? Why you haven’t seen an increase in revenue over the last few months, or maybe even years?
Here are 3 key strategies for overcoming growth plateaus:
Vertical growth means scaling your service/product within your existing line of business. By going deeper into the current market, you get a chance to increase the demand for your product and its adoption.
How can you do this?
- Add more features, capabilities and services to your existing “thing”.
Are you a landscaping company who only offers lawn fertilization and aeration? Try adding a new service to the mix. Are you a mobile app experiencing a decline in downloads? Add new features that make the app more appealing to your target demographic.
- Build and Sell new products or services: Salesforce, the American cloud computing company, is a good example of a company that attained greater market share by developing new products. Salesforce started as a cloud-based CRM software for corporate sales teams. Later, the company developed (and acquired) other cloud-hosted technologies and products in order to target the enterprise market with services like com (an online customer service tool) and Pardot (a B2B sales and marketing automation tool).
Horizontal growth aims at expanding business operations by entering new markets — either new geographical locations and/or business sectors.
Here are 3 ways to pursue horizontal (or “lateral”) growth:
- Replicating your business model in a new market: Given that your current business model works well in one market, there’s a strong likelihood that you can successfully replicate it elsewhere. Two examples of this kind of horizontal expansion are Amazon and Uber. Amazon used an effective e-commerce strategy to dominate the retail market and then branched out into TV and movie markets and applied this strategy in the form of Amazon Prime. Uber leveraged cutting-edge mobile technology in order to massively disrupt the taxi industry and then applied this approach to other markets in the form of new shipping and delivery services (e.g., UberEats and UberRUSH).
- Leveraging your existing assets: Discovering additional ways to monetize the different kinds of value your business could provide is one way to grow horizontally through leveraging existing assets. Amazon, for instance, recognized that it could monetize the hyper efficient network of warehouses that it had created for its own retail sales by offering warehouse services to third parties. Fulfillment by Amazon was thus born: third party companies can now store their products inside Amazon’s warehouses and Amazon takes care of everything else involved in retail transactions (picking, packing, shipping, customer service, and so on).
- Bringing more of your operations in-house (i.e., taking business away from your suppliers): This is quite a common approach to securing horizontal growth. Once your startup gets big enough in size and operations, it makes sense to start carrying out certain aspects of your business in-house. Rather than having third party suppliers or delivery services conduct these operations for you at a cost, you can build the necessary infrastructure to make your company responsible for these services itself. As an example, consider Apple. For many years, Apple did not operate as a retail company (focusing instead on the creation of technology products). Today, however, Apple stores are the most profitable retail shops in the entire U.S., thus enabling Apple to earn additional revenue at the expense of third party retailers who used to capture those earnings.
Develop Strategic Partnerships
A “strategic partner” can be defined as:
- “A party with whom a long-term agreement is reached for sharing of physical and/or intellectual resources in achievement of defined common objectives” (source); or, more simply
- “Another business with whom you enter into an agreement that aims to help both of you achieve more success” (source)
Forming strategic partnerships can help you grow your business by capitalizing on the following competitive advantages that such alliances bring:
- Access to new customers, and opportunities to reach new markets or market sectors: each business can target the other’s set of “warm” customers, thereby increasing customer bases
- Increased exposure and brand recognition: e.g., launching a joint marketing campaign with a non-competing business in order to cross-promote each other’s products or services
- Sharing of resources such as technologies or financial services: e.g., non-competing digital apps startups sharing technologies for the mutual benefits of both companies (such as innovation)
- Expanded geographic reach: unless the strategic partners are operating in the same geographic spaces, it’s very likely that these kinds of calculated alliances will bring with them access to previously untapped markets or areas of the globe
Here are a few different ways in which strategic partnerships can operate:
A. Joint Ventures
A “joint venture”, according to inc.com, is a time-limited and project-focused business enterprise undertaken by two or more companies with the aim of sharing the expense and (hopefully) profit of a specific business undertaking.
The purpose can be to create an entirely new product offering and/or to collaboratively enter (or expand into) a new market.
An example of a joint venture undertaken by two tech companies is the 2014 deal between Facebook’s Oculus Rift and Samsung to develop the Samsung Gear.
Facebook agreed to be responsible for the software side of things, with Samsung building the hardware.
This allowed Samsung to enter a new market (i.e., VR), whilst Oculus got exclusive access to a new distribution channel.
B. Distribution Partnerships
Distribution partnerships are especially helpful if you find yourself in a situation where you’re trying to achieve growth but you’ve exhausted your market reach.
A well-placed distribution partner could help you to tap into new customer segments.
Many years ago Google won a huge share of the online search market by signing deals with various web browser companies in order to provide them with in-browser search.
Over time, this helped Google ascend to the dominant monopoly position it now occupies.
C. Licensing Opportunities
Strategic partnerships in the form of licensing deals can work quite well when your company owns a) technologies that could be vertically integrated into products sold by other startups or b) a reputable, attractive brand from which another company might benefit were it to use your brand.
Two quick examples?
- Starbucks signed a licensing deal with Unilever back in 2008 to have Unilever manufacture, market, and distribute Starbucks-brand ice cream.
- Google inked a licensing agreement with the pharmaceutical company Novartis back in 2014: the two companies agreed to have Novartis use Google’s “smart lens” technology to try and develop new categories of eye-care products (including “smart” contact lenses that would allow diabetics to track their blood glucose levels by measuring eye fluid).
Of course, there are many other ways to overcome business growth plateaus. Setting goals, leveraging technology, and fixing your marketing issues are just a few of the hundreds of possibilities.
Contact JET today, and we’ll help you figure out which of these strategies is right for you!
Or send us a message, here.