Continuing with our thoughts on which way to grow your business, let’s take a look at horizontal growth and see if it is in the cards for your empire. If you haven’t read it already, take a gander at our article on vertical integration.
Horizontal integration brings in other companies in the same industry and/or increases the products and services offered to current markets. Creative entrepreneurs love this. Why? Play. Creating new experiences, solving problems, developing products and seizing opportunities is exciting, and often necessary, for those with short attention spans.
A great example of this is the Virgin Group. Officially incorporated in 1989, they now hold approximately 400 different subsidiaries and have started, sold or closed over 30 more subsidiaries.
There are 3 keys to succeeding well in this model:
- Strong branding: With branding, you have to be known for creating a positive experience for existing clientele to try a new venture. If they feel you don’t have your patrons’ interest at heart (cough, cough McDonald’s), be prepared to see your market value take a dip.
- Strong ideas: When it comes to new ideas companies need to be clear on their purpose, who they are serving, and have an executable plan to make the idea concrete and viable.
- Strong staff: Your team needs to be able to rely on one other to provide cross support in any field, as well as buy into your vision for the long haul. That way, no one is quick to abandon ship if you come across some rough waters.
Choosing which way to grow is important for both the short and long term image of a company, however, the people you must keep in mind are your clients. The support you will get, or not get, is largely dependent on your company’s reputation and public image. If you are not taking care of your clients, they will not take care of you.