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What’s The Difference Between Vertical and Horizontal Growth?

The growth of your business is pretty much every businessowners goal and it is this goal that determines the actions businesses take. But there’s more to it than just growing the business.

When trying to grow your business structure, there’s typically two types that business growth falls under: vertical growth and horizontal growth. And in order to identify your own business goals, it’s important to understand what each type of growth is and the difference between them.

What Is Vertical Growth?

Vertical growth is growing your business in one area. The focus is one something specific – your area of expertise, so to say. Everything your business currently provides or offers is ramped up, maybe adding a complementary feature to it or a product.

It could be an expansion from a rather niche product to something that’s broader, more inclusive to the market.

When talking software, a representation of vertical growth would be something like expanded packages or introducing additional services. As an SEO agency, for instance, if we only offered a copywriting service, we may also add other services such as keyword ranking, social media marketing, paid advertising strategies. That kind of thing.

As they all fall under the umbrella of SEO and digital marketing services, they’re still in our area of expertise which puts them within the same vertical.

What Is Horizontal Growth?

If growing vertically is expanding within your industry, then horizontal growth is the opposite. Horizontal growth means going outside your industry ‘comfort zone’. You present the products or services you currently offer and take them to other markets different from your own.

One of the best examples I can give you of a business that has grown horizontally would be Amazon. Originally just a bookstore and now look at it. They sell electronics, goods, a streaming service… Quite impressive, no?

The thing that gets confusing is that horizontal growth can often appear as vertical growth if the markets are close enough. It is this type of growth which offers businesses the most potential, but only if it’s done right. New markets, new demographics, new products. However, that also means more exposure to competition across multiple markets which can be the difference between a successful product and a failed one.

Which One Is Better?

Naturally when we compare things, we often ask which one is better. After all, we don’t want to leave our competitors to choose the “best” option whilst we don’t. But with vertical and horizontal growth, you don’t really have to worry.

Businesses that have chosen one other the other may say that that one is the best, but really, it just depends on their resources and their industry. They’re both equally good structures for business growth.

Horizontal growth does allow businesses the chance to, excuse the pun, broaden their horizons but this means more investments and more risk. Although there isn’t often a reward without a risk, sometimes it is just too risky to chance a financial loss when a success isn’t guaranteed. So it is common for businesses to put a firmer focus on vertical growth.

There is a different avenue of horizontal growth that a company may consider. Similar to actions Google and Disney have made, rather than developing the new product you wait for someone else to do. If you see that it’s starting to grow, you buy them. This is usually considered more as integration rather than growth.

Growing Your Business Effectively

Whether you’re considering vertical or horizontal growth or integration, it’s always best to lay down a plan or strategy first. Set out clear goals for your business and build the strategy around them – how will you grow your business to achieve your goals?

This is an important part of the strategy because if you’re going to be investing money and time into anything, you should probably have something buildable to work with.

Research will more than likely be your closest trustee throughout all this, figuring out what the demand is for modern markets so you can create something truly unique. Differentiating yourself from the competition is one of the main things you can use research for.

If you come along with the same product as a brand that’s incredibly successfully, you’re not really going to convince anyone to switch to your product. Instead, you have to work around that – why is your product such a good alternative? Being different and setting your products apart also reduces the chances of your product being seen as a copycat.

And, of course, research on your new market is key to success. Why show off your newly developed electronic product to a market that is anti-technology. That’s a bit of an exaggerated example but you see my point.

GrowTraffic: Contact Us

As a multi-award winning digital marketing agency that specialises in SEO, you can trust GrowTraffic with your digital marketing needs.

We know how important growing your business is and you should have a marketing strategy that reflects that. As well as marketing techniques like content marketing, SEO, and social media marketing, it’s important to work on the fundamentals, too. Such as building rapport with consumers and using surveys to get honest feedback.

Our SEO and digital marketing services could be incredibly helpful for you and your business aims! All you have to do is simply get in touch!

Give us a buzz on 0161 706 0012 to speak directly to a GT team member or send an email to info@growtraffic.co.uk.

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