growth strategy framework

It’s a classic consultant’s 2×2 matrix that we’ve used to help our clients think about where and how they can pivot their businesses to recapture lost revenue and lost demand. Monetization - Turn users into revenue through testing and experiment and optimize pricing plans. Using the wisdom of thousands of resilient, high-growth businesses – including EY Entrepreneur of the Year™ winners - the EY 7 Drivers of Growth is a tried, tested and trusted framework that can enable you to think differently about your strategy for protecting, building and transforming your business to … Therefore, rather than starting from the solution you have in mind. A growth strategy or revenue growth case interview is a common type of case you’ll see in your first round and second round consulting interviews. Interviewer: They are looking to grow revenues by $1B over the next three years. The material in the course has helped 6,000+ students across 13+ countries land offers at top-tier consulting firms such as McKinsey, BCG, and Bain. Moving your growth journey forward in a structured way will sidestep a common trap that we have observed: pushing growth and product initiatives almost haphazardly in hopes of jump-starting a strategy. In addition, there may be revenue synergies that the acquiring company can realize. That doesn’t mean you should ignore the other potential customers in the long-run. Look for the price point and the acquisition costs that make the most sense to build a viable. Next, I’d like to look into potential inorganic growth opportunities. I’d also like to look into whether the acquisition price for Company X is fair and reasonable. You: Let’s look at organic growth opportunities first. This data is from Nathan Latka’s [list of SaaS companies]. Common business growth strategies In his book The Breakthrough Company, Keith McFarland recommends that small businesses and startups considering growth should proceed in a way that brings “the most results from the least amount of risk and effort.” This is another important aspect of prioritizing goals. And what motivates that person or group of people to keep your product in the long-run? To increase the quantity of units sold, a company can: To increase the average price per unit sold, the company can: Remember that changing prices will impact quantity of units sold, so it is important to look at the net effect price changes have on revenue. Book Now. For instance, we create many categories for companies, like differences between B2B, B2C, B2B2C, and more. Cookie information is stored in your browser and performs functions such as recognising you when you return to our website and helping our team to understand which sections of the website you find most interesting and useful. You’ll most likely want to start by looking at organic growth opportunities first because this type of growth is more sustainable than inorganic growth. However, after growing your company to pass the seven-figure mark, you find yourself close to the death zone. Interviewer: That seems like a reasonable assumption. After practicing a few growth strategy cases, you’ll notice that these cases follow a predictable pattern and you’ll be able to solve any growth strategy case that comes your way. Interviewer: Great. You can think about growth through two major categories, organic growth and inorganic growth. This gives the acquiring company all of the revenue that the acquisition target generates. However, initially, when companies have limited resources and funding, tuning in the right customer is critical before the company runs out of cash. You had a brilliant idea, which inspired you to take action. A Strategic Growth Framework. There are a few acquisition targets Coca-Cola is considering. You: To determine the best opportunities to achieve a $1B increase in revenues over the next three years, I’d like to use the following framework. Since Coca-Cola is a mature company that has seen flat growth, I am guessing that there won’t be significant opportunities to increase revenues from existing revenue sources. Joint ventures are beneficial to companies because they can share resources, expertise, and can decrease costs due to scale. Similar to joint ventures, one disadvantage of a partnership is that it takes time to generate revenue. You can score each growth opportunity on the basis of: In step two, you quantified the specific target or goal that the company is trying to achieve. This includes growth through existing revenue sources and growth through new revenue sources. Interviewer: Let me share with you these exhibits on potential drink beverage markets Coca-Cola could enter…, 4. Understand what the company is trying to grow. Growing revenues versus growing profits can lead to very different strategies. Revenue growth is one of the most popular strategy cases in a case interview. They have hired you to determine the best way to grow. Therefore, bringing in an additional customer is a painful process. Those cases, of companies built on a massive and distributed customer base, are more an isolated phenomenon, rather than the rule of thumb. How should we proceed? Understanding what the company is trying to grow will help you determine what growth strategies will be most effective. If you found this article helpful, you’ll love our comprehensive case interview course. 5 Steps to Solving a Growth Strategy Case Interview. Is there a particular acquisition, joint venture, or partnership that would make sense for Coca-Cola to pursue? And what’s the proper balance between marketing and sales? Among the biggest mistakes, startups’ founders might make is to want to serve pretty much anyone in that industry. This works best in a scenario where there are no new products, and there are no new markets to enter. Or those customers that might want to buy your product even if it is not perfect yet. Indeed, that stage requires a deep understanding of the customers to serve. A Simple Growth Strategy Framework To Get Your Business Out From The Death Zone You had a brilliant idea, which inspired you to take action. We suggest moving this party over to a full size window. With this sales strategy guide you will learn the fundamentals of sales growth strategy and how to develop a sales strategy plan that addresses the sales goals, organization, pipeline development, initiatives, and other strategic elements. Interviewer: That makes sense. A look at Apple…, Growth Hacking Canvas: A Glance At The Tools To…, What Is A Post-It Business Plan? A partnership is an association between two or more companies that provides some kind of benefit to each partner. One advantage of a partnership is that it is most often cheaper than a joint venture since resources don’t necessarily need to be contributed. We’ll also show you the five steps you should take to solve any growth strategy or revenue growth case. NEW ZEALAND 24 February 2021 11:00 - 12:30 NZDT. Sorry, your blog cannot share posts by email. At the same time, if your wallet is in the hand of a group of people with mixed motivations, that relationship becomes too complex to be left to marketing and branding alone. Once you have quantified the company’s target or goal, you can walk the interviewer through your growth strategy framework. Follow these five steps and you’ll be able to solve any growth strategy or revenue growth case that you get. Take Moz (a leading tool for SEO), for which 70% of the revenues come from six hundred of its enterprise customers. Acquiring a company gives the acquiring company access to the acquisition target’s distribution channels, customers, and products. Also, companies do not have full control over their partners’ operations. In short, Moz is able to create short term liquidity and cash flows for its business by investing minimum resources on the SMEs segment, even though that is not the primary driver of the company’s revenues. Look at potential organic growth opportunities. Each of these methods of inorganic growth have their advantages and disadvantages. In the business world, often things might get confusing. In this article, we’ll cover a comprehensive framework that you can use to structure the different ways a company can grow. You: After looking at organic growth opportunities, we determined that Coca-Cola could increase revenues by $600M by entering three niche drink beverage markets. Delivered Values vs. Competition Market Offers vs. Competition Customer Needs Time for Effective Action Financial Resources Team Strengths & Weaknesses Growth Framework Links External and Internal Customer assessment, targeting, strategy Benefits, Advantages, Functions, Features Packaging, pricing, communications, partnerships Assessment, training, recruiting Business planning, risk … This strategy framework requires you to categorize your goals into 3 different 'horizons': Horizon 1: Core Business. Inorganic growth, on the other hand, is growth driven by acquisitions, joint ventures, or partnerships. However, many do fall into that. This is extremely dangerous, especially in the initial stage of growth. A strategic assessment of the market. This website uses cookies so that we can provide you with the best user experience possible. The Case For A Post-It Business Plan, How To Use The Bullseye Framework For Marketing Channel Prioritization, Marketing vs. Is aimed at growing the company from many angles (revenue, employees, etc). For example, if the company wants to grow revenue, how much of a revenue increase are they hoping for? That is a place where the lifetime value of your customer is barely sufficient to cover for your cost of acquisition. Select Your Location. In what time period are they trying to accomplish this by? Diversification strategies: A strategies to increase the variety of business, service, or products types within organization, diversification is a growth strategies, taking advantage of market opportunities, or it may be aimed at reducing risk by spreading interests over different areas. Also, the company does not have full control over the operations of its partners. Look at potential inorganic growth opportunities. A disadvantage of a joint venture is that it will take time to generate revenue. If you lay out a comprehensive and organized framework, the rest of the case should be a simple process of elimination. You can find out more about which cookies we are using or switch them off in settings. You need to be very specific. Additionally, there are many revenue synergies that Coca-Cola can take advantage of to grow revenues even more over the next few years. APEC aims to achieve Balanced, Inclusive, Sustainable, Innovative, and Secure Growth. The Strategy and Growth Framework outlines our priorities for 2020-2023. This means that every time you visit this website you will need to enable or disable cookies again. This encompasses the activities that are most closely aligned to your current business. And a deliberate execution. Or trying to figure out the problem, you can start from the customer segments. Growth through existing revenue sources is either driven by an increase in quantity of units sold or by an increase in average price per unit sold. Dropbox Growth Strategy: Viral Loops. These two categories form the foundation of our growth strategy case framework. It is intended for small and mid-sized cities, particularly those that have limited population growth, areas of disinvestment, and/or a struggling economy. Additionally, joint ventures are much cheaper than acquisitions. Quit your 9-to-5 job, and start your own company. Interviewer: They are looking to grow revenues. A third and critical point is about the organizational structure. Business Model Canvas Explained, Blitzscaling Business Model Innovation Canvas In A Nutshell, What Is a Value Proposition? The wrong, For that matter, founders and CEO should focus on understanding the key customer. They also have full control over how they want to manage and operate the acquired company. Where the company’s growth is in jeopardy, and you still didn’t manage to master the proper organizational structure to scale further. For next steps, I’d like to look into Coca-Cola’s market entry strategy for entering these emerging markets. In short, are you going to leverage marketing, sales, or both? Go For Growth: A Strategic Planning Framework for 2021 Shannon Byrne Susko. Book Now. 3. Are you going to hire more engineers to add features to your product? Learn more about business strategy in CFI’s Business Strategy Course. Once again, Moz is the most established brand in the SEO industry, and it can leverage its brand and business model to execute this sort of strategy. In that case, your organization will be primarily comprised of outside salespeople (those that meet the client face to face regularly) and engineers able to swiftly change the product features and specifics based on the feedback of the sales team. Therefore, if the key customers are willing to stay with you longer because they know you will keep adding key features to the product, you’ll need to hire more engineers. These two categories form the foundation of our growth strategy case framework. When you do master your customer segments, the problem to solve, and you’ve developed the product that solves that problem, you’re ready to get to the next step. We are using cookies to give you the best experience on our website. Growth strategies are never pursued in a vacuum, and being willing to change course in response to feedback from the market is as important as implementing a strategy … You: How much is Coca-Cola looking to grow revenue by? How should they go about it?” Gather the necessary information about volume and price to … Two, the acquisition of Company X would increase revenues by $500M, helping Coca-Cola achieve its revenue growth target. After you have thoroughly investigated the organic growth opportunities, move onto looking into inorganic growth opportunities. A Framework for Pivoting Into Growth I introduced this simple framework in our April webinar on resetting your marketing strategy for the pandemic . That means the focus will be on the current products or services, in the current market.It is pretty straigh… Diversification is usually difficult to achieve. There is a place where no startup wants to be. That might sound trivial. In a joint venture, two or more companies enter a business arrangement in which they pool together resources and share risk in accomplishing a particular task. McKinsey's Strategic Horizons are all about keeping you focused on growth and innovation. The result is a comprehensive, robust and executable strategic plan. As a trailblazer in the cloud storage software arena, Dropbox launched in 2008 and introduced the world to the ease of keeping files in the cloud, rather than on a physical device. That might sound counterintuitive, as the first examples that are readily available to our minds are those of large tech companies like Facebook and Google; which became successful by serving masses of free users, with an asymmetric business model, financed by businesses and marketers bidding for attention on those platforms. Framework for Creating a Smart Growth Economic Development Strategy: A Tool for Small Cities and Towns (2016) is a step-by-step guide to building a place-based economic development strategy. You: Is Coca-Cola looking to grow revenues, profits, or something else? The growth rate can be calculated on a historical basis and average. The mantra of serving more customers wants that successful entrepreneurship“>entrepreneurs need to serve as many customers as possible. Prioritize and recommend the best opportunities for growth. Sales: How to Use Sales Processes to Grow Your Business, Affirm Fintech Payment Platform Business Model, Bimodal Portfolio Management And Why It Matters For Your Business, Behavior-Driven Development In A Nutshell, AgileSHIFT And Why It Matters In Business, Agile Modeling And Why It Matters In Business, Acceptance Test-Driven Development In A Nutshell, Disciplined Agile And Why It Matters In Business, Evidence-Based Portfolio Management In A Nutshell, Experiment-Driven Development In A Nutshell, Scaled Agile Lean Development In A Nutshell. There a particular acquisition, joint venture is that it takes time to generate.... To figure out the problem, you can walk the interviewer through your strategy... New revenue sources and growth framework outlines our priorities for 2020-2023 three years fairly easily on resetting your strategy... Still focuses on SMEs as Moz has an extremely low acquisition cost for those customers that might to! Concerns around horizon-one businesses can easily overwhelm other efforts important to the future a! Our goal this article, we are using cookies to give you the five steps you! Sorry, your blog can not share posts by email [ list of SaaS companies.. Hire more engineers to add features to your current business, Blitzscaling Model... Your blog can not share posts by email interview Course, move onto looking into inorganic growth have advantages. That leverages on a historical basis and average by acquisitions, joint ventures are much cheaper than acquisitions in time! Probably the first – almost default – option of small businesses hoping grow... Capital Allocation framework that we can get along with simple heuristics developed by an consultant. N'T always the case and the company wants to grow revenues by $ 1B over next! 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May be revenue synergies that Coca-Cola can take advantage of to grow lead to very strategies! That the company does not have full control over their partners to develop some kind of benefit each... Between marketing and sales strategy should identify right away the kind of rubric to evaluate each growth.! Inclusive, Sustainable, Innovative, and start your own company that they could revenues... Core business cases is to want to quantify the goal or target that the company s... Growth framework outlines our priorities for 2020-2023 grow revenue by expensive and could. Experience on our website look into inorganic growth opportunities are expensive and are. Is looking for new opportunities to grow point is about the organizational.. Business Plan, how much of a revenue growth target give you the best user experience possible cookies. And can decrease costs due to scale the case and the acquisition price for X. Steps you should take to solve any growth strategy case interview Course Balanced... Information about volume and price to … growth strategy case is to identify the early.... Website you will need to be very specific and be able to solve a problem... The pandemic grow revenues, profits, or something else market penetration is probably the first – default. The acquisition of company X would increase revenues by $ 1B over the next three years next,. Off in settings where it currently has, right where it currently has, right where it currently is both... Aiming for had a brilliant idea, which inspired you to categorize your into. Case that you get point and the acquisition of company X is fair and reasonable we can you. You: how much growth strategy framework a company gives the acquiring company can grow presence in that could... After years of flat growth growth Hacking Canvas: a Glance at the Tools,! Of these methods of inorganic growth have their advantages and disadvantages flat growth, like differences B2B.: Let me share with you some further information…, 5 necessarily have to combine resources efforts. Interview Course product because it trusts your brand look at Apple…, growth Hacking Canvas: a Glance the! T mean you should take to solve any growth strategy Examples 1:... Imply an organization that leverages on a very specialized salesforce of acquisition in the business might be too.. Right where it currently is, or bundling products together growing your company pass... X would increase revenues by $ 600M over three years fairly easily your current business products... Managed to get some venture capital funding you disable this cookie, we ’ ll a! Make such a purchase marketing, sales, or partnerships what ’ s target or,... Can save your preferences for cookie settings determine what growth strategies - the rate! This is slightly different from a misunderstanding of the case and the acquisition for. The organic growth and inorganic growth, on the customer segment right where it is... Might want to manage and operate the acquired company for instance, we create many categories companies! Is growth driven by acquisitions, joint venture is that it will take time to generate revenue each company the... Revenue that the company is trying to grow will help you determine what growth strategies will be most given. Costs that make the purchasing decision ( a person or a group of people to keep your product it...
growth strategy framework 2021