What is the growth ladder?
- Increase customer retention
- Grow share of customers
- Win new customers
- Develop new products and services
- Enter new markets
- New distribution channels
- International growth
- Acquisitions and alliances
- Growth outside industry boundaries
Describe step 1 of the growth ladder.
Step One: Increase customer retention
HOW:
- Customise value proposition
- Enhance value proposition
- Monitor customer satisfaction & loyalty
- Follow up complaints & defects
- Build customer partnerships
Describe step 2 of the growth ladder.
Step Two: Grow share of customer.
(increase share of customer spending)
HOW:
- One to one marketing
- Added value service emphasis
- Technology driven relationship marketing and customisation
- Gain competitive advantage of established trusting relationships
Describe step 3 of the growth ladder.
Step Three: Win new customers.
- Based on previous stages
- Strong reputation, brand image to attract customers; referrals from satisfied existing customers
- Use marketing mix to encourage new customers & referrals
Describe step 4 of the growth ladder.
Step Four: Develop new products & services.
- Use Ansoff Matrix to review products
- Existing products can existing improved?
- Could range extensions meet customer needs or attract new customers?
- Are there new products that can be developed/purchased/licensed to enhance firms value proposition?
Describe step 5 of the growth ladder.
Step Five: Enter new markets.
- Build on synergies and knowledges on existing markets
- Identity related high-growth market
Describe step 6 of the growth ladder.
Step Six: New distribution channels.
- Opportunities to innovate
- Accelerate growth
- Changing customers
- New technology
- Poor performance
Describe step 7 of the growth ladder.
Step Seven: International growth
- Which markets: how to select?
- How to enter the markets: Risk .v. Reward .v. Control
- Market development: global or local?
Describe step 8 of the growth ladder.
Step Eight: Acquisitions and Alliances
- Fast penetration
- Internal growth can be v costly
- A pre-established business usually less risky
However acquisitions = high failure rate
Describe step 9 of the growth ladder.
Step Nine: Growth outside industry boundaries
- Vertical integration
- Diversification
- Creating new businesses
How do firms organise for growth?
- Management style
- Talent management
- Systems & performance
Inspiring the organisation
Why is growth important to shareholders x level of cashflow?
- More products sold = high level of cash; impact on cost (potential economies of scale)
- Could become a market leader
Why is growth important to shareholders x timing of cashflow?
- Could accelerate timing of cash flow due to products ‘taking off’ in new markets
Why is growth important to shareholders x duration of cashflow?
- More opportunities are available; meaning more likely to sustain cashflow
- Ability to innovate
Why is growth important to shareholders x risk of cashflow?
- Less reliance on one product/market
- Lower volatility
- Loyal customer base
