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Four Fundamental Ways in Which a Business Can Grow Its Revenues and Profits
Most of the companies, especially the ones who are in business, aim at making the maximum profit, since the primary objectives of the company is the financial reason. On the other hand, the stakeholder and the other debt holders are interested in maximizing the amounts of revenues (Scarborough, et al., 2009).
The first strategy that can be adopted is dealing with the increase of the number of the potential customers who are acquainted with the company’s products and services. This can be achieved through generation of prospects. This includes getting more visible markets, which attracts more prospects. The more the business prospects, the more revenue it generates. The second strategy is increasing the conversion rate, which ultimately influences the number of prospects. The rate of the conversion of business prospects to customers makes an impact on the performance of the company. For instance, for the online businesses it is essential to have a website where most of the web visitors are converted to customers. The third strategy deals with the increase of the average prices per sale of the products. This is possible through bundling of products and adjusting the pricing. Changing the product and services portfolio can improve the revenue of the company. The last strategy is the increase of the amount of sales per customers’ overtime. This is because in the current economy it is challenging to attract new customers. Therefore, loyal customers are necessary for the survival of the business.
The Five Generic Types of Growth Strategy Available to Individual SBUs
Growth strategies are essential for a company or organization (Scarborough, et al., 2009). The first strategy involves the increase of the market share. It can be become higher through the company’s increasing production amount which presupposes the expansion of the marketing activities and making sales aggressive to achieve more clients. The products and prices of the commodities remain constant but the sale volumes overcome drastic changes. The second strategy is for the business to enter new markets. The new customers could be theoretically in the different demographic areas with various segments of people that means the versatility of race, gender or culture. This strategy can be beneficial for the acquisition of the new customers at different regions. The third strategy involves identification of the basis of competition for the organization. Most of the companies derive competitive advantage from how the organization produces its products. The fourth is the adoption of information and technology driven strategy, which will reduce the cost incurred in for physical labour. The fifth strategy is the adoption of strategic change, whereby the transformations in the consumer patterns can be predicted so as to fit the production of goods and services.
Metrics Program to Monitor These Strategies Implementing Strategy
Metric program, which monitor the markets and changes the trends of consumers and the product lifecycle, can be designed to monitor the implementation of these strategies. Designing new metrics for the firm is desirable for specifying necessary properties, appropriate for linking the business strategies with the performance of the business (Askar et al., 2009). The product life cycle is increasingly becoming the mainstream of the business strategy. Many of the organization decisions are based on the product life cycle. For instance, either resource allocation, creation of shareholder value or the consumer satisfaction lies principally on the issues of product lifecycle. Ensuring that there are up to date metric plans in the company makes it possible to notice that in the event of the company requiring changing the metric plans, there will be a possibility for modifications maintenance. The process of shrinking product lifecycle, adopted by most of the electronic manufacturing companies, is to outsource the key portions of their business function. In addition, brand proliferation and the building of brand loyalty are essential for the success of the business. This is because these market characteristics are boosted by powerful business trends such as the growing assertiveness of consumers as well as the increased competition. Advancing in the manufacturing technology is suitably modified to fit in to the new metric plans.