You may only have resources for one project at the moment, but that shouldn’t stop you from pursuing other profitable ideas and growing your business. Conceiving strategies for external growth opens up the possibility of inventing new products and technologies. Which can help you achieve sustained growth for your company.
A well executed external growth strategy will help you expand and move your company forward when organic growth is not possible due to financial constraints. Life in the technology world changes at a rapid pace. And for a company to succeed it needs to diversify product lines, identify trends, increase its knowledge base and find new markets.
Licensing enables you to increase your revenue stream by receiving royalties for the technology you’ve created. You allow others to use it, while still holding the rights to the technology. Licensees can grow your overall market by developing features to your technology and allows them to build compatible hardware.
2. External research contracts
In order to diversify your products and find new markets you might want to hire someone with an outsider’s view. You can contract work to companies specializing in industrial design for an innovative look. Or look to laboratories and universities for research needs. Doing so can help you build your patent portfolio.
3. Hiring from industry
You may have identified a trend for a big market that you’d like to enter. However, you lack the necessary skills to do so. In that case you can look to recruit people within the industry who have the competences to implement your strategy.
Alliances allow collaboration with others to develop a technology for a common goal. They enable you to expand your innovation capabilities and also decreases the risks of venturing out on your own.
5. Joint ventures
Here you can partner up with another company and form a separate entity for a project. Joint ventures distribute the cost and risks of the project between the parties involved. And be used to develop new technologies and enter new markets.
Acquisitions can require a hefty investment from your company. However you gain direct access into a new market, by securing the market share and innovation capabilities of the company you’re acquiring. Microsoft has been doing it for years and most recently bought Skype to enter the VoIP market.