Business models and strategies followed by various business organizations can be easily copied and applied to public sector organizations. However, some intrapreneurs are needed to implement them effectively.
One such strategy is the expansion of business lines by growing the business horizontally and vertically.
This is one of the strategies used by product-based organizations to increase their product range. Yes, this can be applied to project-based companies as well.
What does this really mean?
I will explain with an example.
Suppose we have a fabrication business. We typically fabricate structural items for buildings, such as trusses.
Fabricating trusses is a business I do — that is my business vertical.
Now, how can I grow horizontally? I added a design team, which allows me to create my own designs and drawings for trusses. With this team, I can not only design for my own projects but also offer design services to other truss fabricators. When I provide design-only services to other fabricators, I generate additional revenue through my design team. This extension of services within the same industry is an example of horizontal business expansion.
We have further strengthened the design team to handle pre-engineered steel building projects—marking yet another step in our horizontal business expansion.
I realized that pre-engineered steel buildings could also be handled by my team. So, I strengthened the team further and started taking up the fabrication and erection of pre-engineered steel buildings. With this, I have entered a new business vertical — I am now a pre-engineered steel building contractor.
Thus, every business in your organization can be expanded horizontally and vertically.
Normally, horizontal expansion does not require the addition of major assets but rather an extension of your existing services.
New business verticals may or may not fall within the normal scope of your existing business. However, in the example of pre-engineered building fabrication, it is an extension of the current business. Although it is an extension, it represents a new business avenue with significant requirements. You can refine and specialize this business vertical to develop it further. For instance, the same pre-engineered building team can build warehouses and expand horizontally by offering additional services such as electrical and other facility installations required for the buildings.
Here, you gain experience with electrical works as well. Once your team becomes proficient, you can create a new business vertical focused solely on providing electrical services to other contractors. This electrical team can then be expanded horizontally by adding a design team.
Likewise, both horizontal and vertical business expansions can be undertaken.
Let us consider another example:
A coconut oil manufacturing organization normally packs oil in one-litre packets.
It can offer 25 ml sachets for travelers or those who need smaller quantities. These sachets will be sold near railway stations and bus stands, rather than in the areas where the one-litre packets are sold. This can also fetch a slightly higher price.
Similarly, five-litre packets can be sold to hotels and restaurants at a slightly lower price, reducing your packing costs.
This is an example of horizontal business expansion.
Now, if you start selling coconut oil cakes—which are a byproduct of coconut oil production—to farmers, this becomes a new business vertical.
To expand your business, you need to brainstorm ideas relevant to your business and come up with new opportunities.
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