Article by Josep Lluís Falcó – Co-founder and CEO of GENESIS Biomed

• In the Maturity Phase of a project’s life cycle, it is necessary to devise growth strategies to avoid decline.

• Generational replacement is a real challenge for family businesses to address.

• The key to success lies in the ability to adapt.

Business growth is defined as the sustained increase in a company’s revenues, profits, size and influence. This growth can be achieved through a variety of strategies, such as increasing productivity, geographic expansion, launching new products, entering new sectors or acquiring other companies. A company enters a significant growth phase when its growth rate is in double digits.

The life cycle of a company consists of several stages: creation, growth, maturity and decline. In the growth stage, the company expands and seeks new opportunities. In maturity, it consolidates its position in the market and optimises its operations. If not managed properly, it can go into decline, losing competitiveness and reducing its market share, which is why it is advisable to plan for a growth phase before the company enters a decline phase.

There are multiple opportunities to foster business growth. Diversification of products or services allows the company to attract a broader customer base and maximise its revenue potential. To do this, it is key to identify opportunities that are aligned with the company’s values and avoid compromising quality or brand. Another key strategy is market expansion and segmentation, which involves adapting the company’s offering to new customer segments and markets. In addition, strategic alliances and mergers allow the company to expand its reach, acquire new technologies or products and strengthen its negotiating position. However, these strategies require a detailed analysis of the associated risks and benefits.

Barriers and Challenges to Business Growth

There are several barriers that can hinder business growth.

• Lack of capital. This is one of the most important and limits the ability to invest in new products, technologies and market expansion. To overcome this, it is crucial to explore alternative sources of finance, such as investors, loans or grants.
• Lack of leadership and talent. Attracting and retaining qualified talent is essential to ensure sustained growth. To this end, it is recommended to develop internal leaders and foster an organisational culture that encourages innovation and continuous improvement.
• Competition and external threats. To face them, it is necessary to differentiate through a unique value proposition, to innovate constantly and to monitor the market.
• Generational replacement in family businesses. It is a major challenge, as it can generate resistance to change and loss of key knowledge if not properly managed.

Business Growth

There are two types of business growth:

Organic

Organic growth is based on continuous improvement of products, services and internal processes without resorting to acquisitions or mergers. This approach increases profitability and long-term sustainability, improves the quality of products and services, and increases customer satisfaction and loyalty.

To achieve successful organic growth, companies must focus on understanding and meeting their customers’ needs, using digital marketing strategies, expanding their product portfolio and offering customised solutions. It is essential to regularly measure performance through key performance indicators (KPIs), such as customer acquisition and retention rate, customer acquisition cost (CAC), customer lifetime value (CLV) and conversion rate.

Inorganic

Inorganic growth involves expansion through acquisitions, mergers or strategic alliances rather than gradual growth. This strategy allows for rapid growth, entry into new markets and risk diversification. However, it requires a thorough analysis of the opportunities and associated risks.

Mergers can be of different types:

• Vertical mergers, between companies at different stages of the supply chain.
• Horizontal mergers, between companies in the same sector to consolidate market position.
• Conglomerate mergers, between companies in different industries to diversify revenues.

Each type of merger has benefits and risks, such as the need to integrate business cultures, retain key employees and comply with antitrust regulations. To minimise these risks, it is essential to establish clear communication, define a structured integration strategy and ensure compliance with applicable legal regulations.

Business growth is therefore a continuous process that requires well-defined strategies and effective management of challenges. Both organic and inorganic growth offer unique opportunities, but also present barriers that must be overcome with planning, innovation and leadership. But the key to success generally lies in adaptability, market differentiation and efficient management of talent and financial resources.

SOURCE: This article summarises information from the conference on business growth strategies, given by Josep Lluís Falcó, CEO of GENESIS Biomed, and organised by ACCIÓ in Catalonia.