What is Growth Strategy?
A growth strategy is a plan for increasing a company's revenue, market share, or profitability over time. It encompasses organic growth levers such as new products, new markets, and pricing optimization, as well as inorganic options like mergers, acquisitions, and strategic partnerships.
Growth strategy cases require you to think about where growth will come from and how realistic each option is. The Ansoff Matrix is a useful starting point: grow through market penetration (sell more of what you have to existing customers), product development (new products to existing customers), market development (existing products to new markets), or diversification (new products in new markets).
Each growth lever carries different risk and investment profiles. Market penetration is lowest risk but may have limited upside in mature markets. Diversification offers the highest potential but also the highest failure rate. Strong candidates quantify the opportunity for each lever and prioritize based on feasibility and impact.
In practice, companies often pursue multiple growth levers simultaneously. Amazon's growth strategy combined market penetration (expanding product selection), market development (international expansion), product development (AWS, Kindle), and acquisitions (Whole Foods, MGM). The key is ensuring the growth strategy aligns with the company's core capabilities and competitive advantages.
Real-world example
PepsiCo pursued a dual growth strategy: organic growth through healthier product lines (acquiring SodaStream, launching Bubly) and geographic expansion into emerging markets where per-capita consumption was still low.
Related terms
Ansoff Matrix
The Ansoff Matrix is a strategic framework that maps four growth strategies based on whether product…
Market Entry Framework
The market entry framework provides a structured approach for evaluating whether a company should en…
M&A (Mergers & Acquisitions)
Mergers and Acquisitions refers to the consolidation of companies through various financial transact…
Competitive Advantage
Competitive advantage is a set of attributes or capabilities that allows a company to outperform its…
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