Anyone can start a business.
Sign some papers, hire some people and you got a company.
What’s difficult is to grow. Keeping the momentum. Being something better than when you first started.
In this context, growth strategies have become more important than ever and survival in the business world without growth is not sustainable in the long term. We see numerous brilliant growth strategy examples from major companies’ start-up days.
Yet still, growth as the one true goal is a mistake.
There are so many variants to growth, starting with your employees and teams.
Let’s take a look at some iconic company’s growth strategies that managed to put everything in the equation and got them on the top of their game.
4 Strategies of Growth
There are four classical methods of growth.
Of course, in addition to these four strategies, there are also different growth strategies that can be implemented according to the structures of companies by diversifying them.
But basically, all growth strategies emerge and are shaped by these four classical methods. One or more of these may be used together. These are:
1 – Product Development: Activities such as producing new products and increasing the existing product range with improvements and developments.
2 – Market Penetration: The main approach here is customer acquisition. It includes strategies such as product price reductions, product grouping for specific customer profiles, advertising activities.
3 – Market Development: It is carried out with approaches such as opening offices and branches in different locations, selling through different online channels, and giving dealerships.
4 – Diversification: Diversification can be made by starting to operate in a completely different and new market than your current market by introducing brand new products.
The focus and the ultimate goal of all these growth strategies are to achieve growth by gaining new customers.
The reason why is, it is not possible to achieve long-term and stable growth without a regular and loyal customer base.
You can clearly identify how you must use a growth strategy in the light of various criteria such as market, customer profile, your field of activity, and your product.
Now let’s see some growth strategies in practice.
8 Growth Strategy Examples from Big Companies
Growth doesn’t always happen in pre-set ways but there are some cases that are enough to inspire a whole growth strategy by themselves.
Here are 8 growth strategy examples from some companies that are in the technology field.
Now in use everywhere, cloud storage was a very new technology when Dropbox was introduced in 2008.
The way of growth was to persuade people to use such a system instead of the physical storage devices used until then. The growth strategy that the company used for this purpose was market expansion. This method, which is performed through a viral loop, is based on users recommending the system to others.
Then, something changed.
Normally offering 2 GB of free storage, Dropbox started offering 500 MB of extra additional storage for each user registered with your referral link.
In doing so, users who wanted to have up to 16 GB of free storage space recommended Dropbox to their friends and colleagues.
At first, it didn’t work.
But it started providing positive results in the following months and the company reached its one-millionth customer at the end of its first year. The number of customers increased to three million in the next two months. Today, the company serves more than 500 million users.
Created in 2013 by Stewart Butterfield, Slack is a messaging and collaboration tool for enterprises.
It allows company teams to chat and share in real-time. Today, Slack has over 12 million daily active users with more than 100 thousand paid customers. When designing Slack, however, Butterfield had no intention of being a big hit.
Slack was created for covering the communication needs of Butterfield’s team during the design process of Glitch, a games app that can now be considered a fail.
Makes you think, no?
From this fail, however, came great success as the team saw how valuable Slack was to them. The market needed a product where internal team members could communicate easily and exchange project materials quickly, and Butterfield already had one.
Since Slack was created for users with no intention of profit in the first place and turned out to be a great product, further development continued accordingly.
The Slack team always took customer feedback as guidance, replying to every email they received and examining every ticket carefully. This initiation pushed Slack to be a great example of product-led growth.
By maintaining and improving its product, Slack grew larger and larger each day.
Most of these new customers were people who heard about the tool from their friends and colleagues. This word-of-mouth strategy for growth would eventually make Slack end up being indispensable for every company.
When Tinder, first launched, the first problem it faced was the lack of people on the platform.
For this purpose, Tinder has started a campaign in the dormitories in universities and getting one-on-one member registration. This way, the number of members increased from 5,000 to 10,000.
These new members also started to make their friends members. Those who saw that their close friends are members of the app could overcome their concerns about being included in the system more easily. As the number of female members increased, more men began to use the application.
Today, Tinder has become a worldwide dating app with millions of users.
Uber’s growth strategy is among the most successful market penetration strategies, maybe ever.
What they did when they first started the company was actually genius as it is: they were able to find a solution to the never-ending horror story of trying to find a cab.
But hey, the genius idea of having people get a cab on an app could come to anyone (cough, Lyft, cough), what Uber did different and better than everyone was:
- They marketed not only to riders but also drivers,
- They let drivers pick their own schedule in a flexible way,
- They reduced the manpower required by handling everything online,
- They got in the market early, and most importantly
- They were brave enough to venture into other markets, like food delivery
Truly a recipe for ongoing growth.
And as such, today Uber is available in 10,000 cities across 71 countries. Currently, 93 million users are on the platform while there are 3.5 million drivers serving them.
A truly iconic company, McDonald’s surprisingly hasn’t changed its growth strategy drastically over the decades of influence it had on the fast-food industry.
When McDonald’s first opened its doors to customers, it was a slow-cooked barbecue restaurant, and slowly but surely it became what it is today by doing three things.
Keeping it simple, standard, and fast.
McDonald’s growth strategy revolved around a 9 item menu, standard ingredients, and thus, what they called a Speedee service system. And today, their growth depends on a very similar 3-part approach.
Digital, delivery, drive-thru.
So what is their growth strategy exactly? Adapting to change and keeping it fresh.
No one can say no to cash money. It all depends on the amount.
And when PayPal decided that they want to hand out $10 to new users, it probably was a good amount to lure in people. Nowadays, that amount is 5 bucks, but hey free money, am I right?
Why did they give out money though? What company can afford that?
Well, it looks like it was worth it since around the time PayPal first started this campaign they almost achieved 10% daily growth.
Of course, not every $10 was well spent. It is impossible to retain every single user when you are getting thousands flood in daily. But this campaign was so crazy back then that they achieved the marketing they needed while also getting active users.
Remember when Hotmail was just Hotmail? Before Microsoft acquired it?
You probably do, but do you remember what made Microsoft acquire Hotmail for $500 million just 1 and a half years after its launch?
Hotmail’s genius growth strategy back then was one simple sentence at the end of every e-mail sent via Hotmail.
‘’PS I love you. Get your free E-mail at Hotmail’’
And they did.
By the time Microsoft decided to acquire Hotmail, the e-mail company had 12 million users. Guess Microsoft didn’t make their biggest acquisition on a hunch, huh?
Bet we all remember who has slain the rental movie dragon Blockbuster.
What we don’t really remember is how.
Netflix started out as a more convenient way of renting movies when Netflix co-founder Reed Hastings found out he had to pay Blockbuster a $40 late fee but what really turned it into the iconic platform it is today was the fact that the founders found a new court to play.
They were aware that mailing people DVDs wasn’t gonna cut it and at the dawn of the internet as we know it, they launched Netflix for online streaming.
A whole new market was created.
But what really made the difference as compaction was catching up was the personalized content. Then came the Netflix originals. Then they hit social media like a wildfire with Netflix and Chill.
And with the collective impact of all that, Netflix is set to keep growing even bigger today.
As you can tell, there are many different ways of growing as a business.
What matters is one simple thing though: just how much you care about the users you are selling to for your growth.
Any user of any product is buying because they need or want the product.
That means your product should be solving a problem, to begin with. And to keep the momentum of growth, you must know how to present the solution to the customer.
Hopefully, knowing how the big ballers roll is going to help you see your own potential growth more clearly.
Be creative, be smart, be there when it counts.
Frequently Asked Questions
What is a growth strategy with an example?
A growth strategy is a long-term or short-term game plan a company or business develops to keep them in the game and growing. A great example of this is how Mark Zuckerberg got college students using Facebook. Since it was supposed to be a social network, users would be prompted with “invite friends” dialogues which made off-platform people curious and eventually made them users as well.
How do you write a good growth strategy?
The common point in all successful growth strategies from iconic companies is how they put the users’ needs in the center of everything. Once you have a good solution for a real-life problem and you know how to market it, people will notice you.
What strategies do McDonalds use?
McDonald’s currently focuses on three elements of the market: the digital, the delivery, and the drive-thru. As they keep improving in these parts of the business, they have a lot more space to grow in.