- March 19, 2018
- Posted by: Afighi Ogagaoghene
- Category: Uncategorized
When a business grows and expands there are challenges to its continued success. Companies will turn to their enterprise resource planning (ERP) software to support the business growth strategy that’s best for their needs.
Common strategies for business growth include:
• Changing company dynamics.
• Market penetration.
• Expanding to new markets.
• Product diversification and expansion.
ERP Supports Business Growth Strategies
When developing a growth strategy for your company, begin by examining the various generic strategies that applied to most businesses, regardless of type. From there, you can focus on those strategies that contain aspects that benefit your specific needs, allowing you to create the perfect plan for your company.
Changing Company Dynamics
There are times when the best choice for a business is a complete structural change. Not only can a change in dynamics help with financials, but it can also be the final piece of the puzzle to bring the business needed growth and expansion. Such a change can occur through merger, acquisition, or partnership.
Market penetration is a common business growth strategy. Using the market penetration strategy, a company markets an existing product (within the same market) with the goal of increasing the company’s market share. (Market share is the percentage of both unit and overall dollar sales a company has within a specific market compared to all other competitors in that market.)
The most obvious way for a business to increase its market share is to lower its prices, but simply lowering prices may send a message of lower-quality products. ERP software offers several options to help with pricing and increase your market share, including rule-based pricing, which helps you understand the current patterns and trends of the industry, customers, and competitors before making any changes.
Expanding to New Markets
Another common business growth strategy is to expand to new markets. Market expansion—also referred to as market development—entails businesses taking their current products into a new market. Targeting new markets begins by identifying the intended customer base, market, or locations. Effective ideas for marketing expansion include franchising, creating an online venue, and international sales. In addition, a company can use a market expansion or development strategy to find new markets for its products by finding or inventing new uses for them. ERP software has various tools to help businesses with their marketing expansion strategy, such as data collection, marketing reports, and sales reports.
Product Diversification and Expansion
Product diversification allows companies to broaden their product lines and offer more products to their customers. By increasing the number of products a company offers for sale, the company ultimately increases its sales. Offering new features to existing products also aids sales.
ERP tools can help business with product expansion and diversification. By using an ERP solution, companies can offer products more specified to their customers’ preferences. In addition, ERP software can show which products are selling and to whom as well as which products are simply taking up room on the shelves. With this information, companies change their inventory to accommodate the wants and needs of their customers.
By using the tools and features of your ERP system to support your business growth strategies, you help your company gain an advantage over your competition and become a true market leader.