As a small business in Thailand, you can have plans to expand your operations and increase revenue and profits. However, such strategies must be used by businesses in order to execute a growth plan. The method a business uses to grow is largely determined by its financial condition, competition, and even government regulation. Product expansion, market penetration, market development, diversification, and acquisition are all traditional business growth strategies.
Market Penetration Methodology
Market penetration is a business growth strategy. When a small business chooses to sell existing goods in the same market as before, it employs a market penetration strategy. According to small business experts, the only way to expand using established goods and markets is to raise market share.
The market share of a company is the amount of unit and money revenue it has in a given market relative to its rivals. Lowering rates is one way to gain market share. A lower price, for example, can help a company increase its market share in markets where product differentiation is limited.
Expansion or Development of the Market
Selling existing goods in a new market is part of a market expansion growth plan, also known as market development. A business may consider a market expansion strategy for a variety of reasons. First, the existing market could be so competitive that there is no space for expansion.
Any company’s revenues and income will not grow until it finds new markets for its goods. If a small business discovers new applications for its commodity, it may use a market expansion strategy. A small soap distributor selling to retail stores, for example, might discover that factory workers also use its product.
Strategy for Product Expansion
To boost sales and revenues, a small business may extend its product line or introduce new features. Small businesses that use a product growth strategy, also known as product creation, keep selling in their current market. As technology changes, a product expansion growth plan also works well. When older goods become obsolete, a small business may be forced to add new ones.
Diversification for Growth
Diversification is another company expansion technique, in which a small business sells new goods to new customers. This form of strategy can be extremely dangerous. When using a diversification growth strategy, a small business must prepare carefully. Marketing research is essential because a business must decide if customers in a new market would be interested in the new goods.
Acquiring Other Companies
An acquisition may be part of a company’s growth strategy. A corporation purchases another company in order to increase its activities. This approach could be used by a small business to extend its product line and reach new markets. A growth strategy based on acquisitions can be risky, but not as risky as a diversification strategy.
One explanation is that the goods and market have already proved to be successful. Because of the substantial investment needed to execute an acquisition strategy, a business must know precisely what it wants to achieve.
New Product or Feature Development Plan
Introducing new products or adding new features to current products is part of a growth plan. To keep up with competitors, a small business may be forced to change or extend its product line. Customers will begin to use a competitor’s latest technology if this does not happen.
Cell phone providers, for example, are continually introducing new features or developing new technologies. Such companies that struggle to satisfy customer demand would go out of business quickly.
Product Development in New Markets
Small businesses may also pursue growth by locating a new market for their goods. Companies occasionally discover new markets for their goods by chance. A small consumer soap company, for example, might discover through market research that industrial workers enjoy its goods. As a result, the company could package soap in larger containers for factory and plant employees in addition to selling it in retail stores.
Product Differentiation Strategy
If a small business in Thailand has a competitive advantage, such as superior quality or service, it can frequently use a product differentiation strategy. A small manufacturer of air purifiers, for example, can distinguish themselves from competitors through superior engineering design. Companies clearly use a product differentiation strategy to differentiate themselves from their main rivals. A product differentiation strategy, on the other hand, can help a company build brand loyalty.
Price-Skimming Strategy
The price-skimming strategy entails charging high prices for a product, particularly in the beginning. To rapidly recoup its production and advertisement expenses, a small business can employ a price-skimming strategy. However, the product must provide something unique for customers to pay such a high price. The implementation of new technology is an example.
A small business may be the first to market with a new form of solar panel. Customers who just want the solar panels may be able to pay the higher price because the company is the only one selling them. One downside of a price-skimming strategy is that it attracts competition easily. If they have the technical know-how, enterprising individuals can be able to see the profits the business is reaping and manufacture their own goods.
New businesses are often faced with specific challenges. To get a small company off the ground, specific tactics have been used in the past. They can be recognizing product strengths, changing pricing, or purchasing another business. Entrepreneurs can achieve success by understanding and skillfully executing these techniques.
Now you may feel that the above-mentioned points are too generic. But we would like to share that these are applicable to the Thai market as well. You can check through the Board of Investment guidelines for small business in Thailand. It can have relaxations and exemptions in the Corporate Income Tax.
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