The Case for Business Growth – Asrar Qureshi’s Blog Post 960

The Case for Business Growth – Asrar Qureshi’s Blog Post 960

Dear Colleagues! This is Asrar Qureshi’s Blog Post 960 for Pharma Veterans. Pharma Veterans Blogs are published by Asrar Qureshi on its dedicated site https://pharmaveterans.com. Please email to aq.pharmaveterans@gmail.com for publishing your contributions here.

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All businesses wish to grow and become big, some actively do things to grow, most do half-hearted measures. The other dimension is that achieving profitable and sustainable growth is even more challenging because various factors keep arising on the way.

There are two major restrictions to growth: market, and competition.

Any market, be it electronics, healthcare, pharmaceuticals, food etc., is the sum of all players in that market. The market expands because of two factors: addition of new products, and addition of new consumers. However, market expands at a slower rate in this way.

The second restriction is competition which keeps all players within certain limits and does not allow any player to grow exponentially. Exponential growth is always due to outcompeting others with innovative products, not just by smart strategy. The competition shall get to the smart strategy rather quickly but will take time to match innovation.

Growth is a fundamental objective for businesses and organizations, serving as a key indicator of health, viability, and future potential. 

Benefits of Growth

Growth often translates into a larger market share. By expanding operations, acquiring new customers, or increasing sales, businesses can dominate their industry, outcompeting rivals and establishing themselves as market leaders. ‘Size Does Matter’ is very true for businesses. Greater availability, visibility, and usage become perpetual drivers of growth.

Growing businesses generally experience increases in revenue and profits. This financial boost enables them to reinvest in their operations, pay higher dividends to shareholders, and enhance their market position. Higher profits also provide a buffer against economic downturns and market volatility.

As businesses grow, they often benefit from economies of scale. Larger operations can reduce per-unit costs through bulk purchasing, optimized logistics, and more efficient production processes. These cost savings can lead to higher profit margins and the ability to offer competitive pricing.

Growth fuels innovation by providing the resources necessary for research and development. With a solid financial foundation, businesses can invest in new technologies, products, and services, maintaining their competitive edge and meeting evolving customer needs.

Organizations that are growing are more attractive to top talent. Growth creates opportunities for career advancement, professional development, and job security. Talented employees are more likely to join and stay with a company that offers these prospects.

As businesses expand, their brand becomes more recognized and credible in the market. Increased visibility can lead to greater customer trust and loyalty, as well as more substantial influence over industry standards and trends.

Growth signals financial health and stability, which can attract further investment from banks, prospective investors, and other financial institutions. Investors are more likely to back a company with a proven growth trajectory, providing the capital needed for further expansion.

Growing businesses often have the resources to explore new markets, reducing their dependency on a single market or product line. Diversification mitigates risks and opens up new revenue streams, enhancing overall business resilience.

A growing business is better positioned to adapt to changes in the market, including shifts in consumer preferences, regulatory landscapes, and technological advancements. Growth provides the flexibility and resources needed to pivot and stay relevant.

Sustained growth is crucial for the long-term sustainability of a business. It ensures that the organization can continue to thrive, evolve, and meet future challenges head-on. Without growth, businesses risk stagnation and decline, potentially leading to obsolescence.

How can growth be achieved and sustained?

All markets grow with time. It is called natural growth and is dependent on increased consumption, population increase, and economic growth. Even this growth is not equally allocated to all players, rather it is distributed according to the effort players do. More ambitious organizations target extraordinary growth, which is much harder to come, yet is achieved by those who meticulously plan and execute with consistency.

The first and most important factor is commitment to growth. I have seen in many corporates that they talk much about growth but do not do enough to pursue, which is a function of lack of commitment. And it has to be corporate wide commitment. Another common feature I have seen is that the growth is considered to be the sole responsibility of marketing and sales departments.

The second factor is courage, the courage to make bold moves. The present times are uncertain and unpredictable, and it requires special initiatives to extract growth from the market. 

The third factor is innovation. It is not possible to achieve extraordinary growth without doing new things. Innovation applies to developing new products, expanding usage of products in new ways, and finding new ways of doing old things.

The fourth factor is proportionate resource allocation. It is a complex area because resources are required for innovation, for upgrading systems if needed, and for aggressive marketing. Each segment competes for resources, and it is up to the management to ensure that allocation is done judiciously and in line with the growth objectives.

The fifth factor is to stay loyal to the core. If an organization is in pharmaceutical business, it may be counterintuitive for them to get into food business. Every business has its own nuances which can only be learnt with time and experience. Diversification within the core is easier, while going in a completely different field would be tricky and difficult.

Sum Up

Growth is not just about expanding size or revenue; it's about ensuring the long-term viability and success of a business. It brings numerous benefits, including increased market share, financial stability, innovation, talent retention, and adaptability. By prioritizing growth, businesses and organizations can secure their future, remain competitive, and continue to meet the needs of their customers and stakeholders.

Concluded.

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