Horizontal Growth Strategy
Horizontal growth means expanding products/services to new markets. This can be done by developing a new market or penetrating an existing market. Additionally, you might try to apply existing assets to a new business domain, such as transitioning from a product to a SaaS model.
Pros:
Highly lucrative
Better long-term ROI
Cons:
Challenges unique to new markets
Increased competition
Example: Uber launched in San Francisco, but later rolled out to thousands of locations across the globe. Additionally, the company launched UberEats.
Vertical Growth Strategy
A vertical growth strategy means scaling products/services inside an existing market. Typically, businesses add additional features or capabilities to existing products/services. You might also add products/services to complement existing products/services.
Pros:
Allows you to go deeper into existing markets
Most popular growth strategy
Cons:
Typically requires more money
Workforce capacity problems
Examples: Instagram is much more than just a photo-sharing app. This tool enables users to share videos. In recent years, they even rolled out a live video recorder.
The vertical market software size is anticipated to rise from US$ 123.0 Bn in 2022 and it is projected to surpass US$ 402.4 Bn by 2032. The adoption of vertical market software is projected to increase at a CAGR of 12.6% during the forecast period.
Vertical market software is designed for a specific industry, application, or audience. This is in contrast to horizontal market software, which can service a variety of industries. The demand for vertical market software market is anticipated to rise as it is frequently developed and tailored to aid in meeting the demands of a single firm or industry, such as manufacturing, insurance, or banking.
The demands of a particular industry or business inside a recognized and observable vertical market are addressed by vertical market software. Horizontal market software, on the other hand, focuses on several industrial verticals, and as a result, the products created are generic to serve a wide range of users. Many consumers, students, and corporations use word processors and spreadsheet programme, hence these are some typical examples of horizontal market software. With the aid of vertical market software, clients can receive better-tailored solutions that may aid in vertical market software market share expansion.
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