Company Growth Strategy Examples: Preston’s Pet Store

Dog fetching ball and running in green grass

There are 4 major growth strategy examples that most companies are familiar with. These strategies include market penetration, diversification, product development, and market development. These ideas have been explored in books like Robert Swaim’s The Strategic Drucker and Peter S. Cohan’s Disciplined Growth Strategies

While there’s a fair amount of information that companies need to understand before they can begin undertaking these strategies, it’s always best to start with fairly simple examples. In this scenario, we’ll be working with a fictional pet shop, Preston’s Pet Store, as our archetypical business. We’ll also be looking at “best case scenarios,” in which the business has the funds and resources to approach these strategies.

If you’re ready to look more deeply into any of these strategies, a business coach can help you set goals and find peer groups that are pursuing the same targets. Catalyst Group ECR brings decades of business experience to the table, and we invite you to contact us to set up a consultation.

Background

Preston’s Pet Store has been in business for about 10 years. While they are still doing a comfortable amount of business, the owner, Preston, hopes to increase sales throughout the upcoming quarter. Preston has some liquid assets saved up, around $20,000, that he is able to pour into growth.

Market Penetration

In market penetration, you tackle the market and the products as they already are. This can involve hosting promotions, attending events, or even doubling down on advertising. Create more brand awareness and you’ll see growth. Preston decides to start walking puppies down to the farmers market on the town square every Sunday. He sees an increase in purchases from people who met the dogs while doing their weekly shopping.

Diversification

Introducing new products to your lineup is a great way to spark a renewed interest with past customers and draw in new ones. Preston takes the foray into selling rabbits as part of his stock in the months before Easter. He mails flyers to parents in the area as the holiday approaches.

Product Development

If you already have a great product, find ways to enhance it. Just like diversification, it creates more awareness and interest in your company. Preston decides that he’s going to work alongside of his diversification strategy, the rabbits, and offer a rabbit care bundle. He offers a promotional pricing package that includes a bunny of choice, a hutch, alfalfa hay, a water bottle, and a coupon for a second bag of food to be used the following month.

Market Development

Finally, instead of focusing on your product, focus on your market. When it comes to pets, people either want the responsibility, or they don’t. A major part of owning a pet, and some people’s hesitancy to take on the task, is learning how to properly care for and train them. Preston begins offering weekly classes for non-pet owners interested in making their first purchase. By signing up for the program, you receive puppy training classes, as well as the opportunity to win a week’s worth of kenneling services. Preston has now established two new streams of revenue: one from the fee for the classes and another for the future purchases made by his students.

 

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