The 6 preconditions for business growth

The current economic growth offers companies lots of opportunities. Still many companies struggle to transform the economic growth into increased turnover or margin which decreases the chances for long term successful business. Analysis shows that 6 preconditions must be met in order to make a business realize it’s growth potential.

1. Positioning
Successful companies choose for a clear positioning of its service or product. This positioning needs to be aligned with trends in market and society. A good positioning will attract a specific target group and with that a distinction can be made from competition. This ensures that volume growth does not erode margins. Via radical positioning (f.e. by focusing on niche markets) margins can even be increased. A clear positioning also gives a guideline line for employees to focus all efforts in supporting the company in achieving its ambitions.

2. Insight in internal capacity en capabilities
It might sound strange but it turns out very regular that company leaders do not have a clear picture of the available capacity and capabilities. Often a qualitative picture is known, however a quantitative analysis can lead to surprising insights. This objective, qualitative information can be used to take well informed decisions on how to shape the future operation of the company. And it is certainly not the first time that a thorough data driven analysis shows that investments can be delayed or even prevented.

3. Business strategy in line with operations and organization
A good business strategy is needed, however an operation and organization which is fully congruent with the strategy as well. And that is often not executed thoroughly. This makes that the commercial departments want more than operations can deliver. And that creates the well-known and destructive frustration at both sides. A fully aligned business strategy with the operation and organization creates maximum synergy within the company. This can bring companies to exceptional levels of performance.

4. External orientation
A company is as good as its clients rate it. Therefore it’s extremely important to know what the market expects from potential suppliers and to translate this into the entire operation. Needless to say that information on competition is required to identify new developments in products or services and to ensure proper decision making is done to identify the correct and timely response. In addition mergers and acquisitions can expand capacities and capabilities or create more impact within the value chain of a product by forward or backward integration. Successful companies know what to do to stay ahead of competition and to capitalize that into additional sales volumes and margin.

5. Short and long term
A good balance between short term and long term objectives makes that the growth of the business is sustainable. Ensuring sufficient adaptability and flexibility is required to turn current opportunities into growth. A clear vision for the long term is required to gain maximum effect from investments in assests and innovation which ensures a timely product and/or service portfolio refreshment. This makes the business growth sustainable.

6. Company culture
At the end of the day it’s the people who make the difference and therefore the company culture is so crucial for businesses to become successful in realizing their growth ambitions. There are many factors which contribute to the development of a company culture and therefore it’s quite difficult to steer it in to a new direction. Successful companies however do not hesitate in facing this challenge.

The above shows that successful growth of a company involves many aspects. CUSTOR Consultancy is specialized in strategy development and deployment, operational improvements and organizational design. We use our business expertise to make company realize their ambitions. If you are struggling with the growth of your business contact Jan van Leur (+31 (6) 4915 4273) or leave a note at www.custorconsultancy.com.

Categories: Algemeen, Management, Strategy