Why Many Business Growth Strategies Fail
Companies can use many business growth strategies, like the ecommerce growth agency Common Thread Collective, to expand their operations. However, not all of these strategies are equally effective.
Some are downright counterproductive and can lead to a decline in sales and profitability. This article will discuss some of the most common growth strategies that fail and explain why they don’t work.
Common Business Growth Strategies
One of the most common business growth strategies is increasing advertising and marketing expenditures. The logic behind this strategy is that by increasing visibility, you’ll also increase sales.
However, this isn’t always the case. Research has shown that increased visibility doesn’t always lead to increased sales. It can have the opposite effect if customers feel bombarded by too much advertising.
Another common growth strategy is to lower prices to attract new customers. This might work in the short term, but it’s not a sustainable strategy. Lower prices mean lower profits, which means that you won’t be able to invest in long-term growth initiatives. In addition, lowering prices can signal to customers that your products or services aren’t worth the total price, damaging your brand in the long run.
Perhaps the most common growth strategy is to try to do everything at once. Companies often try to launch new products, enter new markets, and undertake significant expansion projects simultaneously. While it’s certainly possible to successfully execute on multiple fronts simultaneously, it’s also challenging. Trying too many things at once often leads to subpar results across the board.
Other Reasons Business Growth Strategies Can Fail
Here are four other reasons why common business growth strategies fail:
They’re Built On Assumptions
One of the biggest problems with common business growth strategies is that they’re often built on assumptions. For example, a common approach is to find a niche market and then become the go-to authority in that space. However, this assumes that a niche market is willing and able to pay for your product or service. In reality, there is no guarantee that this is the case.
Focusing On Short-Term Gains Instead Of Long-Term Sustainability
It’s easy to get caught up in short-term gains, but if those gains come at the expense of long-term sustainability, they’re not worth it. For example, sacrificing profitability to achieve rapid growth is a short-term gain that is not sustainable in the long run.
The same can be said for cutting corners to save money. Yes, you might save some money in the short term, but if it results in defective products or services, you will only hurt your business in the long run. Focusing on sustainable strategies to help your business grow long-term, even if sacrificing short-term gains, is essential.
They’re Based On Luck
Another problem with common business growth strategies is that they rely on luck rather than skill or technique. For example, many businesses try to grow by simply hoping they’ll get lucky and stumble upon a winning formula. However, this is often nothing more than a game of chance. Luckily plays a minimal role in a business’s long-term success.
They Don’t Take Into Account The Competition
Another issue with common business growth strategies is that they often fail to consider the competition. For example, many businesses attempt to grow by trying to beat the competition at their own game.
However, this ignores that the competition is likely doing the same thing! As such, this can lead to a never-ending race to the bottom in terms of price and quality—a race that nobody wins.
Final Thoughts
Companies like the eCommerce growth agency Common Thread Collective can use many business growth strategies to expand their operations. However, not all of these strategies are effective.
Some of them can lead to a decline in sales and profitability. This article discusses some of the most common growth strategies that fail and explains why they don’t work. When planning for business growth, it’s crucial to choose designs that are likely to be effective and avoid those that are likely to fail.
