We have found that some leaders are limiting their potential for company growth because they fail to examine all the possible ways to achieve it. As you focus on growing your business, remember there are five key pathways to consider:
Grow Organically – Organic growth is growing by acquiring more customers or selling more products. If your organic growth has stalled, consider some creative ways to re-energize your organic growth before you rush to adopt another strategy. When organic growth stagnates, be prepared to go back to the fundamentals. At the same time, be prepared to think outside the box and search for less-than-obvious solutions.
Exit the Market – The best pathway to growth may be to get out of the market you are in. This may allow you to refocus on your core competencies and specific areas you want to grow in. A recent example of this strategy is GE divesting its finance arm in order to focus more on manufacturing.
Be the Low-Cost Provider – Sometimes organic growth can be achieved by dramatically cutting costs. However, this approach is unlikely to drive long-term expansion.
Do Nothing – Of course, doing nothing is rarely if ever a pathway to growth. However, many executives and business leaders drift into it by default. When things seem to be going more or less satisfactorily, we all get tempted to keep doing what we are most accustomed to. However, the long-term costs can be disastrous.
Pursue External Growth – With external growth, expansion is achieved by engaging with entities outside your company. There are many forms of engagement, including strategic alliance, joint venture, minority investment, and acquisition. External growth can be one of the most exciting and powerful paths to growth and in many cases, it should top your list of potential strategies. However, external growth should be considered within the context of the other four alternatives so you can make an informed decision.
Once you have considered each of the five pathways to growth, you can carefully assess which pathway would best serve your company.
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