A business plan for growing market share should identify where the business is today and the strategic steps necessary to increase its competitive position. A plan is important because, in view of economic downturns and global competitive forces, businesses do not have the luxury of wasting limited resources on strategies that have no chance of success. Build a business plan for market share growth by concentrating on a few key strategic initiatives.
Analyze the profitability and market growth potential of each of your product and geographic segments by examining sales and profit data from recent quarters. Reallocate your marketing investments to maximize return — in other words, increase your budget for segments that represent the highest profit and growth potential. For example, if your analysis shows the Midwest market is saturated but the Pacific Northwest market remains under-served, reallocate marketing and research dollars there because it represents the better growth potential. There is likely to be resistance from your business managers to this kind of reallocation because it might reduce their business development opportunities. Explain your strategy to them and consider adjusting the performance targets for managers affected by lower resource allocations.
Identify the strengths and weaknesses of your key competitors. Emulate their strategies (such as matching competitor price discounts) or devise responses (such as offering newer products and improved customer service) to position your company better and take market share away from your competitors.
Explore mergers and acquisitions for growing market share, especially if one of your smaller competitors is serving a market niche for which you have no comparable products. For example, if you are expanding into a new geographic market where a local business already has a small but established customer base, exploring a merger or a joint venture might make more business sense than trying to build market share from scratch.
Assemble a leadership team by bringing together senior management and key product and geographic business-unit managers. Restructure your compensation structure to include incentives and bonuses for managers who are successful in driving market share growth.
Grow the overall market by adding new products and services. When Apple introduced the iPod and followed up with the iPad, a new market formed for those gadgets. You do not have to be an Apple to add to or extend existing product and service lines. For example, if you own a restaurant, add to your selection of appetizers and desserts. If you run an accounting consultancy service, hire a tax professional and offer tax-planning services to your existing clients. By making the overall market bigger, you will be growing sales and potentially taking market share away from your competitors.