Achieving Desired Sales


Let us assume you are a 5 Million $ company and your vision is take it to a 50 Million $ company in 5 years and for sure you know that if you continue doing what you are doing now you can only become a 15 Million $ company in 5 years. If that is your situation (I know most of the business are in the same situation) then how do you achieve the desired Sales Target? Though looks like a very challenging question to address a very interesting framework that I recently came through addresses it in an excellent manner

The broad ways of filling the gap in Sales is through the below growth strategies

  1. Intensive Growth
  2. Integrative Growth
  3. Diversification Growth

Intensive growth is all about exploiting opportunities in your existing businesses. Obviously it is a first logical step for anyone to look into. In your current markets, using your current Products / Services you deliver, you can go for a “Market Penetration Strategy” to increase your Sales. The “Market Penetration Strategy” is all about

(1)    Selling more to your existing customers

(2)    Gaining your competitor’s share by providing better value proposition to your customers

(3)    Convince more potential customers (Prospects) to buy your Products & Services

Integrative growth is about getting into related businesses to the business where you are in by utilizing your core competencies. Integrative growth can be achieved by

(1)    Backward Integration – It is about acquisition or you getting into your Supplier’s Business (e.g.)  Reliance getting into petrochemical business from selling polyesters

(2)    Forward Integration – It is about acquisition or you getting into your distributors / resellers / retailers business (e.g.) Coke and Pepsi acquiring bottling plants where they saw a major value addition and better control to fight competition / serve markets

(3)    Horizontal Integration – It is about acquiring your competitors (e.g.) Oracle acquiring “N” number of its competitors products. Due to space limitation I am not listing the products / companies here J

The last one Diversification growth is about getting into new areas. Again three broader ways of doing this in a meaningful way

(1)    Concentric Diversification – Enter into a new business where you have technology synergy (e.g.)  CISCO from being a Routers selling  company to one that sells Consumer Electronics, Networking and Communication technology products and services through a series of acquisitions over a period of time)

(2)    Horizontal Diversification – Enter into new Business where you may not have technology synergy but you can sell those products to your current customers  (e.g.) TATAs capitalizing their Brand value among existing customer base to sell new products to existing customers (Salt to Software)

(3)    Conglomerate Diversification – Enter into areas where you don’t have any synergy in technology or customer base or products or markets (e.g.) General Electric from manufacturing turbines for power plants to as diversified like Technology, Healthcare, Capital Finance, Industrial Products, Consumer good etc through series of acquisitions

OK, doesn’t make your life easier? Yeah I know you might be having a question on How do we execute? How do you get funded? Where do you get other required resources, What is the right option to chose? How do I measure by Progress, Does more revenue means more profits etc?.  Would try to get answers to these questions and keep you posted

Meanwhile if you can use the above framework and come up with a business plan for CRMIT, you may be suitably rewarded. Keep sending your inputs to postsuggestions@crmit.com

(Courtesy book on Marketing Management by Philips Kotler)

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