Growth Strategies are about making sure that systems are in place to influence the continuous improvement of the business, and the continued quality of the services or products that it produces for the market. Businesses can grow either organically (through increases in their market, e.g. exporting) or they can grow by merger and acquisition of related businesses.
Among the best known of these systems is Total Quality Management (TQM). TQM offers a critical set of philosophies, strategies and processes upon which to build and grow a business.
Related systems for growth include systems to promote Research and Development (R&D), effective Information Technology, and a variety of systems to control finances and inventory management.
When contemplating growth strategies, the following topics should be considered:
- the various systems available
- the options of a change, merger or acquisition
It is important to seek advice from your lawyer and accountant in order to develop and manage appropriate growth strategies for your business.
Systems allow businesses to continuously change and improve the delivery of products and services through gaining feedback and measurement about product performance in the marketplace. These systems focus upon control of quality, research and development, information technology and financial information.
Total Quality Management (TQM) is a universally adopted business philosophy that has introduced many systems of measure and control into businesses of all sizes. In short, TQM focuses on the value chain. That is the two-way relationship between:
Your business needs to implement a quality system to protect the performance of these linkages.
Six steps in setting up a quality system are:
- set up the quality statement and objectives in consultation with your staff and key customers
- link your quality plan to major parts of your business plan
- document the major procedures that impact on the way you do your business (see Flowcharting)
- set up systems that allow you to gain customer feedback (see Market Testing and focus groups, surveys, interviews)
- establish an active set of partnerships with your key suppliers to ensure that customer needs are met by your products and services
- encourage employees to review and build on various features of the quality system
Benchmarking is another feature of TQM. It involves gathering and sharing information about the generation and delivery of a service or product with other businesses. You can choose a variety of groups to benchmark against. Often these benchmarking partners include competitors, where there is an agreement that information is gathered and shared across several businesses on a number of criteria.
- measures of customer satisfaction levels of product return
- levels of product failure
- measures of staff satisfaction
- production time
other criteria jointly agreed as relevant and comparable across the businesses. At its simplest, you can use informal partnerships with other businesses to share and learn from each other.
Change, Merger and Acquisition are deliberate strategies for growing the business by acquiring new business capabilities either by internal growth and change or by acquiring other businesses through merger and acquisition.
Much has been written about successful and unsuccessful efforts to change businesses. The reality is that people, and in turn, businesses (which are just groups of people), find it hard to change, or they find change easy initially but in the long-term get “change fatigue”.
Poorly managed change, often a failed merger or acquisition, produces:
- strategies that are not enacted
- increased rather than reduced operational costs
- unhappy staff
- dissatisfied customers
- reduced company profits
Where an internal change, merger with another business or acquisition goes well, several steps (possibly in this order or close to it) are often found to have occurred:
- Senior staff established a sense of urgency for why change was needed, or put forward a great business case for why the changes made sense.
- People whose opinions mattered got together early to agree to support the change or merger.
- Clear strategies and action plans were put in place and were widely communicated around a realistic timetable that altered if more time was needed.
- There was a strong communication program in which staff regularly heard through presentations, emails, newsletters and personal chats with senior people about how the change was progressing.
- Staff were encouraged to report difficulties emerging due to changes or merger/acquisition, and they were encouraged to resolve these problems at a local level.
- Successful completion of stages of the change, merger or acquisition were celebrated by all staff.
- The change was cemented into new structures, values, behaviours and systems in the new business.
- New staff that were hired had values and attitudes that matched those of the successful changed or merged business.
Your local bookshop, daily newspaper or business magazines all have numerous reports about organisational change. Also talk to others in business about their personal experiences with change – especially listening for what they would not do next time.
Most importantly, consult your lawyer or accountant for strategic advice before embarking on any of the above paths.
Exporting occurs when goods leave Australia and go to another country or when you provide a service in another country. Because the Australian market is relatively small and competitive, it tends to limit the ability of a company to grow to the full market potential of its product or service. Exporting therefore offers the opportunity to achieve large-scale financial returns from sales of your product or service in international markets.
Exporting is not for everyone. The major prerequisite of successful exporting is to have a product or service with international market applications. As in the domestic market, you need to be able to demonstrate that consumers in your target export markets are willing to pay for your product or service, and that you can effectively compete on price and quality.
For those companies that have never considered exporting, extensive research and careful planning is required before doing so. While the financial rewards can be lucrative, the costs and risks associated with doing business abroad are very high.
Assessing your export readiness is the first step in deciding whether exporting is a viable option for your company. This will help you to make effective decisions based on logical, systematic thinking. Seeking advice from your local State Development Centre or Austrade office can assist you in assessing your export readiness. They can also help you understand and manage the critical elements of export planning, including researching your markets, developing an export strategy and export logistics.