Business growth is almost always a positive thing for most companies but can become problematic if you don’t have a strategy to handle this process.
Too many firms approach growth without a careful and measured understanding of what they want to achieve with this expansion.
As a result, a good Market Expansion strategy is critical for businesses that want to succeed in their many goals.
Creating a plan of this type requires a careful understanding of what it represents and how you can integrate various goals and processes into this unique planning procedure.
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What Is a Market Expansion Strategy?
A Market Expansion strategy is an approach that helps companies grow when they have already expanded as far as possible in their existing channels.
This strategy’s primary focus is to ensure that all of your current markets are already fulfilled and satisfied with your products and services as presented.
These strategies must consider all of your assets, your existing and new products, the capabilities of your facilities, and what potential untapped markets you could potentially focus on with your current strategy.
Defining these channels and your potential new customers allows you to expand your operation in a focused and effective manner.
Beyond this benefit, a good Market Expansion strategy also helps to make sure that you aren’t expanding too fast for your own good.
Too many companies try to blindly expand and push into new markets without taking the time to understand the risks and rewards. By having a strategy, you give yourself the best chances of success.
Why Market Expansion Strategies Are Important
The creation of Market Expansion strategies provides a large number of benefits that help businesses grow.
Thoroughly understanding all of these benefits should make it easier for you to decide if this process is proper for you or not.
Make sure to note each of these advantages and weigh them properly before making a choice.
Reduce Costs
A good Market Expansion strategy cuts down on your costs by focusing your products and services where they are wanted.
For example, if you have a scooter you’ve marketed heavily toward senior citizens, you may find that younger adults are also interested in these scooters for daily use.
Instead of blindly focusing your research and expansion into creating new scooters for all young adults, you can cut back on costs by appealing to those who seem interested.
The idea here is to expand logically and avoid excessive spending on a market that just isn’t going to go your way.
Mitigate Risks
Expanding a business is an inherently risky process, one that can cause as many problems as it does benefits.
However, a good Market Expansion strategy takes these risks into account and finds ways to decrease their severity, ensuring that your company remains strong and secure.
Decreasing your risks in this way is crucial because it helps avoid the kind of unnecessary mistakes that too many businesses make. And it also helps reduce the chance that you’ll run into unforeseen risks during expansion, a problem that too many companies simply don’t prepare for adequately.
Reach Business Opportunities
An unhinged or unfocused market expansion is likely to cause you to miss real business opportunities.
For example, you may be expanding into one market with all of your resources and find it impossible to take advantage of a new market because you are committed to a different strategy.
Thankfully, a high-quality Market Expansion strategy will make it easier for you to find these business opportunities and focus exclusively on them.
In this way, you’ll be able to jump on these changes and avoid over-extending yourself into areas that don’t make sense for your business needs.
Improve Tax and Compliance Benefits
Tax and compliance benefits for business operations help mitigate your expenses and reward you for taking proper steps.
However, a good Market Expansion strategy will enhance these benefits by allowing you to follow the various codes that define them.
For instance, you can write off much of your expansion on your taxes if you use a strategy that follows their guidelines.
You can also better reach compliance with various other procedures, such as proper safety testing and FDA compliance, by streamlining your expansion process properly.
How to Develop a Successful Strategy According to the Ansoff Model
When you are creating a Market Expansion strategy, it is a good idea to follow the Ansoff Model.
This concept is a tool designed to help businesses expand and grow in a streamlined and straightforward manner. It typically uses four different strategies that help make this process easier, including:
Market Penetration
This approach utilizes the existing products you already have and focuses on increasing the sales you already have in your market.
It is usually the first step that most companies take when expanding their market presence.
Product Development
In this phase, you will create new products and introduce them into a market into which you already operate.
Often, this step utilizes services or items similar to what you already offer but with an expansion or improvement.
Market Development
During this expansion stage, you will begin entering a new market using products you have already developed.
This tentative expansion is typically critical for companies that want to move beyond their initial early developmental stages.
Diversification
The result of many Market Expansion strategies is diversification. It allows you to expand into new markets with new products.
As you may expect, this approach is the riskiest and the one that takes the most work to execute correctly.
Below, we’ll include a handful of steps that help you plan for and execute each of these steps.
By following these examples and streamlining your expansion, you can create a strategy that enables you to reach that golden plateau of market success — constant and profitable development.
Market Expansion
Expand your market presence by focusing on your existing products and boosting them throughout a market you already possess.
Spend time on marketing your items, focusing on their benefits and advantages. You can then try to subtly and carefully expand into different areas using a few different approaches, trying to take advantage of your competitors’ potential mistakes in this field.
Making a Marketing Research Strategy
Market research is crucial for any Market Expansion strategy because it gives you a better understanding of the market’s wants and needs.
By fully understanding these facets, you can decide whether you want to focus on your existing products or begin expanding into new outlets with new products. Make sure to take a reasonable and measured approach in all these endeavors.
Expanding Into New Channels
Make sure that you are continually looking to expand into new channels with all of your growth.
New channels provide you with a connection to a more significant number of potential sales and business partners, allowing you to boost your bottom line even further.
Just as importantly, this approach will enable you to make strong connections that will fuel further business growth and keep you competitive.
Engaging New Audiences
Your brand audience consists of potential buyers throughout various markets, including potential buyers, those who already buy from you, and people who may be interested in new products.
Ensure that you use your market research to identify these individuals and engage with them using fun marketing, social media outreach, and other steps that expand your presence in the market.
Focusing on Brand Growth
Branding is essential for any marketing expansion, and you need to remain consistent and powerful with your branding to succeed.
Ensure that you expand your brand in ways that make sense for your needs, such as utilizing your logo on new products, expanding your messaging to new potential partners, and paying particular attention to the underlying message of all your branding attempts.
Increasing Sales on Existing Products
There’s no need to ignore your existing products if you already have a strong presence with them and feel confident that you can reach a broader audience.
Focus on promoting these products any way that you can, highlighting their benefits, expanding into different markets, utilizing updates on the product that makes it more efficient or useful, or taking any other steps that make sense to you at the time.
Introducing a Line of New Products
When introducing new products into a market, you need to make sure that you’ve researched whether there is a need for these items, where they fit into the market on which you are focusing, and the potential risks you may experience.
When done correctly, this type of Market Expansion strategy will instantly transform your business and make you more successful in ways you can’t imagine.
As you can see, creating a Market Expansion strategy is a significant benefit when appropriately approached.
By following the Ansoff Model and effectively maximizing your growth, you can tap into the market’s inherent trends. In this way, you can spread your business far and wide.
If you are interested in learning more about this process, watch our webinar on “Developing a new business category: how to make your brand stand out from the competition”, with Mark Organ!
