Best Internal Growth Examples + 8 Expert Strategies

Jenny Abouobaia
16 Mar 2023

13 min. read


With recession odds falling below 50%, businesses are increasingly more hopeful that growth is within reach. And to grow during trying times, businesses need to turn inward and use their resources with utmost efficiency.

But how can you achieve internal growth?

Read on to discover the best internal business growth strategies.

Pro tip: Fuel your internal expansion by penetrating foreign markets. To this end, make your website, app, and other content available in local languages. A professional localization suite is your best aide in this endeavor. Learn more.

Internal growth strategies you are about to learn include market penetration, market and product development, and product diversification. This article also offers clear internal growth business examples for each strategy.

Let’s get started. business people wearing suits Source: Canva

What is internal growth?

Internal growth, or organic growth, is a company’s use of internal resources to expand its size, profits, and customer base. Expansion requires the development of new products and penetration of new markets.

To facilitate internal development, companies reduce spending and increase automation.

Ready to take a plunge and expand your business internally? Make sure your internal growth strategy rests on the following pillars:

  • Knowledge management
  • Capacity expansion
  • Workforce development
  • Workforce expansion
  • Cultural change
  • Operational restructuring

Challenging? Yes. Slow? You bet.

And yet, the internal growth of a business is one of the most sustainable and reliable forms of growth.

4 Internal growth strategy examples

The following internal expansion strategies are at the heart of all growth plans:

  1. Market penetration
  2. Product development
  3. Market development
  4. Product diversification

Let's explore internal growth business examples for each strategy.

Market penetration strategy

Market penetration aims to increase sales of already-available products or services. Increasing market share requires attracting new customers or motivating existing customers to buy more. Companies often use this tactic to grow their market share in an already established industry.

Pricing penetration

This strategy involves businesses adjusting prices to attract customers to a new product at a discounted price or lowering prices to attract budget-conscious customers.

A good example of pricing penetration is when McDonald’s started selling coffee and launched an effective marketing campaign to increase its market share. Customers received a free small coffee every morning between 4–7 am for a limited time. McDonald's announced its new coffee partnership with Green Mountain Coffee to generate interest for its offer.

Developing new products and improving existing products

This strategy aims to make a product more attractive to customers by improving its quality, features, or packaging. Coca-Cola has used market penetration strategies for a long time. For example, they introduced newer flavors and variations of Coke Zero and Diet Coke, two classic Coca-Cola products. Their goal was to attract new customers by offering healthier or lower-calorie options while retaining their current clientele.

Promotion and advertising

This strategy aims to increase brand awareness and attract new customers by using advertising and promotion. A case in point is Amazon’s introduction of the Amazon Prime loyalty program and free shipping on certain products. Promotion and advertising have helped Amazon increase sales and market share by attracting and retaining customers.

Expanding to new locations

Expanding to new locations using market penetration is an effective way to reach new customers and increase your market reach. Most retail stores use this particular market penetration strategy to grow their businesses. One such example is Starbucks.

Starbucks opened various stores across the country and adapted the menu and the design of the stores to local preferences. Starbucks increased its market share and built a loyal customer base by expanding into new territories.

market penetration strategy Source: Canva

Market development

Market development involves selling your current products to new markets to grow your business.

Many leading footwear companies, such as Adidas and Nike have entered international markets to expand. Global expansion continues to be a priority for these companies, and market development like this is a perfect example.

Market development is a low-risk business growth strategy. Since market development requires a lower level of investment, it is ideal for businesses that are low on capital or unwilling to incorporate riskier growth strategies.

Product development

You can also grow your business internally by expanding your product line to increase sales, known as product development. The product development strategy adopted by Google is a great example.

In the beginning, Google was a company that offered a search engine as a business-to-consumer (B2C) service. A new set of capabilities was required as the product moved from a B2C audience to a business-to-business (B2B) audience. Google Maps was launched in 2005, but it wasn't until 2008 that the company began monetizing the app through APIs and local advertising.

With YouTube, Google launched its next revenue-generating service in 2008, where content creators were able to earn through advertising. Product development continues to drive revenue for Google, as evidenced by smartphones, wearable tech, Chromecast, Android TV, and other products.

product development cycle Source: Canva

Product diversification

Diversification comes with a double dose of uncertainty since new products are sold to new markets. And yet, it could be successfully leveraged as exemplified by Amazon. The company used a "four-pillar" growth strategy to achieve product diversification success.

Amazon launched Amazon Web Services (AWS) in 2002 as part of its diversification efforts. In addition to storage, networks, databases, message services, and artificial intelligence, this cloud service platform also provides infrastructure services available in more than 240 countries.

Amazon used diversification as one of its most effective strategic tools to gain a competitive advantage. The successful examples of Amazon’s product line diversification include Kindle, Amazon Prime, Fire TV, and Firestick.

business growth graph Source: Canva

5 Advantages of internal growth

When exploring business expansion opportunities, consider the following advantages of internal growth strategies:

1. Making your mark on a new market

Access to new markets is one of the main advantages of internal growth. The international expansion c territories and customers, thereby increasing sales. Furthermore, your business can avoid overdependence on a single territory by having a geographically-diverse customer base.

2. Risk reduction

By growing internally, companies retain ownership and control. They can set healthy growth goals regardless of the stage of the business cycle. This degree of control is unattainable with external growth through mergers. As such, internal growth is more secure than external growth.

3. Less disruption

During internal growth, customer and employee disruptions are less likely because products and services are provided consistently. In addition to having their expectations met, customers also see recognizable faces. This promotes customer and employee loyalty, which further contributes to the company’s operational stability.

4. Improved company culture

Business leaders can establish a company-wide growth culture through their oversight. When discussing and evaluating organic growth opportunities, they pass down the growth mindset to middle and operative management.

Effective communication across departments is facilitated by everyone speaking the same language. This prevents conflict, miscommunication, and potential departures from the organization's objectives and risk appetite.

business meeting around a table Source: Canva

5. Sustainability

A trajectory geared toward external expansion is more challenging to maintain than organic growth. The benefits of organic growth will be more significant if you're building an independent business rather than a multinational corporation.

Organic expansion of your business can be smooth and relatively effortless once your business operations have gained stability. Needless to say, small businesses are better positioned to reach operational stability than their large counterparts.

Pro tip: Internal growth is less risky and more cost-effective than external growth. Small businesses looking to expand their market share should leverage internal growth strategies to grow consistently.

Challenges of internal growth

Although there are many advantages to internal growth, there are two challenges you should consider:

Growth is slower

As you are relying solely on your internal resources, it takes significantly longer to see results than it would via acquisitions or mergers.

When integrating the resources, customers, and markets of two companies, growth can happen almost overnight, thereby increasing share prices. For this reason, internal growth is usually discouraged by company shareholders who prefer faster external growth.

Limited opportunities for expansion

If a company is already the market leader, it is difficult to expand any further through internal growth. In this case, the only real opportunity for substantial growth is through acquisitions or mergers.

Is internal or external growth better for your business?

An alternative to internal growth is external growth. External growth occurs through acquisitions, mergers, or the use of external resources such as partners and investors.

Understanding that internal and external growth strategies are not mutually exclusive is essential. Whether you are growing a company internally or externally, the goal is the same — increasing its size, market share, and profitability.

The types of external growth are as follows:

  • Takeovers and mergers: An example could be when two companies join forces to create a new company. Over half of a company's shares can be bought by an existing company when expanding.
  • Strategic partnerships: You can expand your business beyond your local market by partnering with other companies. The solution to reducing competition may be to partner with a competitor.

When growing internally, increase revenue by focusing on areas you do not have direct control over, such as acquiring new customers. To accomplish your external growth goals, acquire another company or form strategic alliances and partnerships.

8 Internal growth strategies

Growing a successful business requires more than just picking a direction. An ideal business growth strategy must include an action plan for achieving your long-term growth goals. To help you get started, here are a few proven strategies.

1. Introduce new products

Looking for existing gaps in the market and introducing new products to meet that need is an additional way you can achieve internal growth. Of course, developing new products takes a significant development and production investment, but it is one of the best ways to achieve continuous growth.

While developing a new product may be a big step, it is undoubtedly a practical internal expansion strategy. Before investing in an expansion project, ensure a new product has a realistic earning potential.

a woman holding a new product Source: Canva

2. Establish new markets

Many companies attempt to grow internally by entering a new market. A new market is a section or demographic of the population your company has not yet penetrated. Capturing new markets is a cost-effective way to grow organically because it doesn’t require research and development.

Niche marketing can increase brand exposure. Additionally, it can appear more useful, be more efficient, and build a big audience. You might be able to expand your geographic reach by focusing on different demographic groups.

3. Increase production

Assuming there is enough demand for your products, one way to promote internal growth is to increase the production of existing products. Increased production leads to more sales and potentially to some of the highest levels of growth.

4. Cultivate your team

Having a terrific team behind you is what makes a leader effective. To help your team generate growth-promoting ideas, consider scheduling regular meetings and brainstorming opportunities.

This is a chance to gain a new perspective and the ideal way to optimize internal business processes. It is also a great opportunity to build teamwork and culture and ensure employees know their opinions are valued.

5. Get to know your existing customers

A brand's success depends on its customers. Any future campaign you might have will be unsuccessful if you fail to understand how your brand interacts with your customers.

Connecting with your customers and responding to their needs will help you understand them better and build strong relationships. Find ways to continuously show them that you care about them, not just when you want their business.

How do you get to know your existing customer base?

  • Research potential customers: To learn your potential customers’ habits and preferences, use pilot programs, focus groups, and beta tests. The information you’ll gain is instrumental in entering new and expanding current markets.
  • Make yourself accessible: Building a trust-based relationship requires dialogue and listening to your customers. Provide customers with an easy way to voice and resolve their issues. Assist and inform by providing support, service, and advice.
  • Study all feedback: To learn what works and what doesn’t, study customer feedback. Avenues for constructive criticism can soothe the anger of unhappy customers and provide you with valuable insights.

6. Improve your customer service

Providing excellent customer service is one of the best ways to build long-lasting relationships with customers that continue to buy your products and recommend you to others, and in turn, expand your business.

The more you go the extra mile for your customers, the more likely they will refer you to their friends, families, and followers. Good customer service, like discounts to dissatisfied customers, builds your reputation and trust as a quality business.

If you have a customer service team, ensure you have a communication setup that reflects the needs of your target market. Phone and online support are imperative in today’s business landscape.

woman working in customer service Source: Canva

7. Extend value for current customers

Strive to create value for your customers to improve your brand's reputation, profit, and long-term success. The likelihood of your customers buying from you again and sharing their positive experiences with others is higher when they feel they have made a good purchase.

Asking your customers what they find beneficial is the best way to learn what they value. Understanding your customers' needs can help you improve your product, increase sales, and build loyal customers.

8. Invest in organic and paid marketing

Visitors that come to your website via search engines are referred to as organic traffic or free traffic. To drive organic traffic, invest in organic marketing. Paid marketing, on the other hand, involves the generation of website traffic through pay-per-click (PPC) advertisements and affiliate programs.

Investing in both organic and paid marketing is an effective internal growth strategy. Here’s how to do it.

Develop engaging content

Successful sales copywriting on landing pages and product pages can increase your traffic and consequently revenue tenfold. You also have an opportunity to provide additional value to your customers by having a blog on your website.

Focus on SEO

One of the main benefits of search engine optimization (SEO) is organic growth over time, which is hard to achieve without it. A successfully-implemented SEO strategy will increase the likelihood of your website appearing in search results. This might require a complete overhaul of your website and meticulous curation of your content.

Utilize social media

Having a social media presence is more than just posting and counting the number of likes. Leveraging social media, you can communicate, discover, collaborate, and connect with a worldwide customer base to reap tremendous benefits for your business.

Fashion house Gucci invested in social media marketing following a decline in profits. Gucci's revenue has since increased as a result, and with over 50 million followers, the company has one of the fastest-growing followings on Instagram.

gucci instagram page Source: Instagram

Localize your website

Adapting your content to a different language for your target audience is called localization. Your original meaning, intention, and vision must also be translated to align with your brand and local values.

Pro tip: Use a professional localization platform Centus to manage the localization of your website. The platform enables seamless cooperation between developers, translators, and designers making website localization a breeze. Learn more.

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