29.1 Growing the Core Business
The first place to look is usually the existing business. Growth from the core can be faster and less risky because the client already has customers, products, capabilities, and market knowledge.
Potential levers include improving pricing, increasing sales effectiveness, reducing customer churn, increasing product availability, improving conversion, or shifting toward higher-value products.
Key question: What is preventing the current business from reaching its full potential?
Before recommending expansion into unfamiliar areas, determine whether meaningful growth is still available within the core.
29.2 Increasing Penetration
Penetration means increasing the share of potential customers who buy from the company.
This can come from:
- Customer acquisition: Winning customers who currently buy from competitors.
- Conversion: Turning more prospects into paying customers.
- Distribution: Making the product available to more potential buyers.
- Awareness: Increasing the number of customers who know about the offering.
Important: Estimate how much room for additional penetration actually exists. A company with 80% market penetration has less headroom than one with 10%.
29.3 Increasing Frequency or Usage
A company can grow even without adding customers if existing customers buy or use the product more often.
Examples include increasing restaurant visits, purchases per year, subscription usage, transaction frequency, or quantity per order.
Possible tactics include loyalty programs, reminders, additional use cases, subscriptions, bundles, and improved customer experience.
Practical question: What limits how often customers currently use the product, and can the client influence that behavior?
29.4 New Customer Segments
Growth may come from serving customer groups that the company does not currently target.
Segments might differ by age, income, company size, industry, behavior, needs, or willingness to pay.
For each potential segment, evaluate:
- Size: How much revenue could it generate?
- Need: Does the current offering solve a meaningful problem?
- Economics: Can the segment be served profitably?
- Fit: Does the client have the required capabilities?
Do not assume that a large segment is automatically attractive if serving it requires major changes to the business model.
29.5 New Products
New products can generate growth from existing customers or create access to entirely new markets.
Consider whether the company can:
- Extend an existing product line.
- Add premium or lower-cost versions.
- Create complementary products or services.
- Bundle existing offerings.
- Develop a completely new offering.
Evaluation: Examine customer demand, differentiation, development cost, pricing, margins, cannibalization, and launch capabilities.
A new product that simply shifts customers away from an existing product may create less incremental growth than it initially appears.
29.6 New Channels
A company may grow by changing how it reaches customers.
Potential channels include direct sales, e-commerce, retail stores, marketplaces, distributors, partnerships, resellers, and mobile platforms.
New channels can increase reach, but they may also change margins, customer ownership, pricing control, and operating complexity.
Example: Selling through a distributor might expand geographic reach quickly while reducing the client’s margin per sale.
Evaluate both incremental revenue and the economics of the channel.
29.7 New Geographies
Geographic expansion can create significant growth when the existing market is mature or the company’s offering can travel well.
Evaluate:
- Market attractiveness: Size, growth, customer demand, and profitability.
- Competition: Strength of established players.
- Customer differences: Whether the product needs adaptation.
- Capabilities: Distribution, sales, operations, and local knowledge.
- Barriers: Regulation, tariffs, language, infrastructure, or investment requirements.
Key question: Can the client reproduce its existing advantage in the new geography?
29.8 Inorganic Growth
Inorganic growth comes through acquisitions, joint ventures, partnerships, or other combinations rather than building growth entirely internally.
An acquisition might provide immediate access to customers, products, capabilities, technology, or geographic markets.
Evaluate:
- Strategic fit: Does the target strengthen the client’s growth strategy?
- Economics: Is the expected value greater than the purchase price and integration cost?
- Synergies: Can the combined businesses generate additional revenue or lower costs?
- Integration: Can systems, operations, teams, and cultures be combined effectively?
- Risk: What assumptions could cause the investment thesis to fail?
Final principle: Growth cases should move from ideas to economics. Start with the core business, then consider new customers, products, channels, geographies, and inorganic options. For each opportunity, ask how large it is, how profitable it could be, whether the client can execute it, and what risks could prevent success. The strongest growth recommendation is not the most ambitious option—it is the one most likely to create meaningful, sustainable value for the client.
