Ways to Use Organization Strategies for Business Expansion

Ways to Use Organization Strategies for Business Expansion

There are hundreds of businesses that started small but are now worth billions. What sets them apart from the rest is their ability to grow and expand their businesses.

IKEA, a home furnishing company, started as a small mail-order business in Sweden. Today, it has more than 400 stores in over 60 countries. What made IKEA so successful? The company applied great organizational strategies that allowed it to proliferate.

Another good example would be Ben & Jerry’s. The ice cream company started as a small ice cream parlor in Vermont. It is now one of the most popular ice cream brands globally, with over 615 scoop shops in 38 countries.

But how? How did they grow from ground zero to where they are now?

Enter: Organization Strategies.

Organization strategies are essential for businesses to expand successfully. By definition, it is “a planning process that involves the creation and maintenance of an effective structure to achieve the objectives of an organization.” To have a successful business expansion, you need to use these strategies.

But, who thinks of all these different ways? Do you need to hire a consultant or contact an agency? You can if you have the budget, but hiring a manager with an MSOM degree would be better.

MSOM stands for Master of Science in Organization Management. It is a relatively new degree, but it covers everything you need to know about organizational strategies.

Types of Organization Strategies

Traditionally, there are four different organizational strategies with different focuses.

1.      Corporate Level Strategy:

The top level of the management team is responsible for this strategy. It defines the overall direction of the company.

What does the company want to achieve? How are they going to get there? In terms of business expansion, it assists in identifying new business opportunities.

A company strategy, for example, might be to purchase the country’s major tissue paper firms to establish oneself as the uncontested industry leader.

2.      Business-Level Strategy:

The middle management team is in charge of this strategy. It defines how a company plans to compete in a specific industry or market.

What does the company want to achieve? How are they going to get there? In terms of business expansion, it helps identify new ways to grow the current business.

For example, a business-level strategy for a company in the textile industry might be to focus on sustainable and eco-friendly materials.

3.      Functional Level Strategy:

The lower management team is responsible for this strategy. It focuses on how each department or functional area within the company can best support the business-level strategy. In terms of business expansion, it helps with the day-to-day tasks of expanding the business.

For example, a functional level strategy for a company expanding its product line might be to increase the number of sales representatives.

4.      Operational Level Strategy:

The operational level team is responsible for this strategy. It focuses on the day-to-day tasks and operations of the company.

There are three types of operational strategies: process, capacity, and location.

These strategies assist business expansion by ensuring that the company has the resources and capabilities to support growth.

For example, an operational level strategy for a company expanding its product line might be to increase the production capacity of its factories.

Ways to Use Organization Strategies: Business Expansion

Now that we’ve gone over the basics of organization strategies, let’s look at how they can be used for business expansion.

1.      Market Penetration:

The first way is market penetration. This strategy is used to expand the company’s sales in its current markets. The aim is to increase market share. The company can use various methods, such as price discounts, advertising campaigns, and new product launches.

You may use this method to increase your market share in various ways. For example, if you operate a pest control firm, you might start a campaign offering free chemical treatments to pet owners.

You’ll gain a more significant market share due to this since you provide a highly sought-after service in the marketplace.

2.      Market Development:

Saturated markets can present a challenge for businesses looking to expand. In this case, market development is an effective strategy.

It involves entering new markets to increase sales. The company can target new customer segments, develop new products, or expand into new geographical areas.

For example, a company that manufactures electric vehicles might enter the market for commercial vehicles. It would involve developing new products and marketing them to a new customer segment.

3.      Marketing and Promotion:

Nothing sells if nothing is known about it. It is where marketing and promotion come in. Marketing is the process of creating demand for a product or service. Promotion is the process of communicating the product or service to potential customers.

In terms of business expansion, marketing and promotion help create awareness for the company’s products and services in new markets. They can also be used to increase sales in existing markets.

For example, a company expanding into new markets might use online and offline marketing tactics. It might include creating a website, running social media ads, and exhibiting at trade shows.

4.      Customer Relationship Management:

Customer relationship management (CRM) is a strategy to improve customer satisfaction and loyalty. It involves creating systems and processes to track and manage customer interactions. CRM can also be used to upsell and cross-sell products and services.

CRM proves to be an essential strategy for business expansion as it helps to retain existing customers and attract new ones. In fact, studies have shown that it costs six times more to acquire a new customer than it does to keep an existing one.

For example, a company expanding its product line might use CRM to track customer purchase history. It could then use this information to offer targeted discounts and promotions on new products.

Why You Need Organization Strategies

You might be thinking, “My company is doing just fine. We don’t need any of these organization strategies.” But the truth is, all businesses can benefit from using them.

Organization strategies help businesses to identify and exploit new opportunities. They can also be used to overcome challenges and achieve goals. In other words, they help businesses to grow.

A few benefits of using organization strategies include:

Concentrating on New Product Development:

Expansion can be geographical, into new markets or customer segments, or product-oriented by introducing new products or services.

Organizational strategies can help businesses expand by concentrating on new product development by, for example, allocating resources to research and development.

Bigger Customer Base:

Another advantage is that international expansion will increase your customer base, which can help you develop your company. If you expand internationally, you’ll have a more extensive client base, so use it to your benefit.

You may attract more consumers from other countries and utilize their markets to advertise your goods and services.

Increased Brand Awareness:

Expanding abroad is a big step for many small businesses, and it may provide a significant boost to brand recognition.

You will not only be able to attract consumers who will purchase your items but also assist you in marketing your goods and services in other nations.

Final Thoughts:

There is a whole new world of opportunities for businesses willing to take the plunge and expand. But it’s not a decision to be made lightly.

Before expanding, companies need to do their research and develop a solid plan. Once you manage to grow successfully, though, the rewards can be great.