Growth Strategies for Small Businesses: Achieving Business Success - Essay Sample

Introduction

A business strategy is a working plan of a business or firm, which assists the entrepreneurs in achieving specific objectives of their companies through customer's attractions, successful competition, and strengthening the performance (Luenendonk, 2017). Small businesses need a strategic plan that can give business success. There are several options of growth strategies that small businesses can choose that is depending on various circumstances and factors in the hope of expanding the business operations and occupying a large market. Market penetration is an example of a business strategy that can fit in a small business because it reduces the cost of production, fights competition, and creates rapid growth.

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Market penetration is an essential strategy in small businesses that have hopes of expanding and growing up their operations. The plan works best in scenarios where there is no entry of new market s and new products. Without any other option, the business will focus on what it has and where it is located, which means that the focus will be on the services or products that are available in the market (Luenendonk, 2017). Therefore, the small business is expected to market its services or products in that same market, with the objectives of increasing the market shares.

The competitive way of operating a small business is implementing a business strategy because of the competition faced by the business so that the market shares can increase. There are some of the strategies of market penetration that can be employed in small businesses. These strategies include reducing the price of the services and products offered, increasing services or product promotions, expanding the channels of distribution, and applying useful improvement on the products (Luenendonk, 2017).

The main intention of reducing the price of services and products is to attract more customers. With this strategy, even if there are other businesses, the market share of the business goes up to other businesses because of lower prices. Apart from conventional or non-conventional forms of advertisements, a small business can employ another means of attracting customers (Luenendonk, 2017), for example, using special offers, unique promotional events, and offering discounts. This strategy attracts even those who are not aware of the product in the market. Expanding the channels of distribution means that we should look for more retailers, dealers, and distributors. A full distribution channel creates excellent chances of reaching out to many customers who are even far from the market. Lastly, if the existing product features are improved, many people are encouraged to buy the product. This is achieved through a change in the assertion in the advertising and packaging of the new product.

This strategy of market penetration can encourage a new small business because it helps the owners to understand the number of competitors in the market. The plan creates rapid growth of the company because it enlarges the customer's base quickly. This is easily achieved, especially when there is an offer of low prices that lures out customers (Scott, 2020). Low prices attract many clients, which results in to increase in the volume of sales and substantial growth. Also, the new business needs various channels of distribution that creates a large market for the product. Promotional and advertisements are required to attract more customers who are aware and those who are not aware of the products.

Besides boosting sales, the strategy also lowers the cost of production. An increase in the volume of sales, companies turns into quick inventors, which can result in the free purchase of goods from the suppliers in large quantities at discounted rates (Scott, 2020). With the low production cost, new business gains more profits from sales. The strategy is also useful for small new businesses because it fights off competition. This can be achieved by lowering prices and using unique promotional events (Scott, 2020). Many customers are attracted to low prices. Low prices also prevent new business entrants from the market. To sum up, market penetration is needed in a small business so that it can increase market shares and productivity.

References

Luenendonk, M. (2017). 7 Business Growth Strategies for Small Businesses. Retrieved from. https://www.cleverism.com/7-business-growth-strategies-for-small-businesses/

Scott, C. (2020). Market penetration strategies for small business owners. Retrieved from. https://www.quickbooks.intuit.com/r/pricing-strategy/how-to-price-your-products-and-services-for-maximum-market-penetration/