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Focusing on survival or growth

New and existing businesses rarely want to stand still and simply keep the position they have in a market. Instead, they are likely to focus on either survival or growth.

Two types of business primarily focus on survival:

• new businesses in their first year of operation
• established businesses under threat, for example from their competitors

However, over time, as a business becomes more recognised and achieves a secure position in the market, it may change its aims and objectives to focus on growth.

On some occasions, established businesses in very competitive environments may be forced back into a position where survival becomes their main aim. This could be due to low sales, increasing competition, changes in trends and tastes, poor economic performance, or an overall change in market conditions.

Entering or exiting markets

A common growth strategy for businesses is to enter new markets. A new market could consist of a different age group or gender, or in some circumstances it could be customers in another country. The aim of entering new markets is to grow the business overall, develop a new target market, and ultimately grow the business’s market share across multiple markets. An example of this would be a women’s fashion retailer introducing a range of men’s clothing.

Businesses also occasionally exit markets. They do this for a number of reasons, for example:

• a shrinking market
• poor performance of the business products
• a new market opening up
• the business failing overall

Often, exiting a market is seen as a survival strategy for a business. An example of a business in the UK that has exited a market is Morrisons. This supermarket chain did not have the money to invest in the convenience store market like Sainsbury’s or Tesco, so it focused on its larger supermarket stores instead.