The Seven Degrees of Freedom for Growth was created to address managers who restrict growth ideas while trying to expand their business. Each degree helps managers open their minds and break out of existing thinking patterns. The Seven Degrees are:
- Selling existing products to existing customers – The first step is to focus on selling more of the existing products to current customers. Analyzing the marketing strategy to persuade current customers to increase the size and frequency of their purchases is a simple way to encourage company growth. Another option is to look at pricing to learn if there are adjustments to pricing strategy that can add extra value to customers and increase growth.
- Acquiring new customers in existing markets – This degree considers how to attract new customers to increase growth in the existing product lines. One way to do this is to use market segmentation to divide the market into niche groups. This way, the company can develop new marketing approaches with particular appeal to customers in specific segments.
- Creating New Products and Services – This third degree focuses on developing new products and services to enhance company growth, as well as improving on current products to generate more appeal to new and existing customers.
- Developing New Value-Delivery Approaches – This degree relates to the handling of products in transit to customers. A company would look to improve the way in which it creates, offers and delivers their products in order to increase growth. This includes evaluating how outsourcing might speed up production and therefore delivery times, or new distribution channels which would reach new consumer segments.
- Moving Into New Geographies – This degree looks at increasing distribution in current geographic markets in addition to looking for new opportunities in areas which haven’t yet been explored.
- Creating a New Industry Structure – This degree encourages the use of alliances and acquisitions to grow the business. Partnering with and acquiring new businesses can help create better economies of scale and increase bargaining power with suppliers. This can be a powerful way to add to company growth, but also has risks associated with it due to the unpredictable nature of mergers and acquisitions.
- Opening up New Competitive Arenas – The last degree of growth to look at is the investigation of new opportunities via diversification. By using tools such as VRIO Analysis and Core Competence Analysis, it may be possible to learn of skills and resources that already exist within the organization to diversify and expand into new markets and industries.