Growth and Survival Strategies for Small Businesses

Nlebgwa, Shathiso

Shathiso.nlebgwa@mopipi.ub.bw

Nlebgwa, Shathiso

Shathiso.nlebgwa@mopipi.ub.bw

strategic management

Growth and Survival Strategies for Small Businesses

ID: 200501244

strategic management

Growth and Survival Strategies for Small Businesses

ID: 200501244

Table of Contents

Introduction 2

Market penetration 2

Diversification 3

Product expansion 4

Market Expansion 4

Acquisition and Mergers 5

Conclusion 6

References 6

Growth and Survival Strategies for Small Businesses

Introduction

Small businesses wants to grow and increase both sales and profits, but in order to do so, there are certain growth strategies that need to be employed. These strategies will depend on the businesses’ resources and the industry environment. These directly influence the business and its competitive actions and competitive responses. This paper shall discuss the following growth and survival strategies; market penetration, diversification, market expansion, product expansion/development and, acquisition and mergers.

Market penetration

A central important principle of marketing is that all marketing activities should focus on the needs, wants and demand of customers. It implies a focus on the customer or end consumer of the product or service (A. Binsard., 2003). With market penetration the firm sells more of its current products or service to the target market. This is usually the first step a business takes to grow. The owner knows his/her customers, understands their needs and their buying behaviour therefore it is less risky strategy as it deals with current customers. For start-up and early stage businesses, it is appropriate to use this strategy and its main advantage is that it is easier and less costly while the firm keeps customers happy. Market penetration starts with the entry strategy, which has to provide access to local resources, such as distribution networks and access to local businesses and authorities (Meyer, Klaus E....