GROWTH STRATEGIES and Crisis In Business Growth

Presented by: Sahana

Archana Gitanjali

Prithwiraj

Strategy Strategy means a deliberate and well-planned course of

action designed to achieve specific objectives. Growth strategy Growth strategy may be defined as a strategic plan

formulated and implemented to expand the operations of biz firm.

TYPES OF GROWTH STRATEGIES Competitive Advantage – something which gives

the organisation some advantage over its rivals Cost advantage – A strategy to seek out and

secure a cost advantage of some kind - lower average costs, lower labour costs, etc.

Market Dominance: Achieved through:

Internal growth i.e. Through Expansion and diversification Acquisitions – mergers and takeovers A merger means combination of two or more firms into one. It may occur

in two ways: (a) Merger by Absorption, and (b) Amalgamation The merger may result in: Horizontal Integration. Vertical Integration. Concentric. Conglomerate.

Internal business level strategies – Downsizing – selling off unwanted parts of the

business – similar to contraction

Delayering – flattening the management structure, removing bureaucracy, speed up decision making

Restructuring – complete re-think of the way the business is organised

New product development: to keep ahead of rivals and set the pace. Developing new or modified products for sale in the existing market

Contraction/Expansion – focus on what you are good at (core competencies) or seek to expand into a range of markets?

Price Leadership – through dominating the industry – others follow your price lead

Global – seeking to expand global operations

Reengineering – thinking outside the box – looking at news ways of doing things to leverage the organisation’s performance

SUB-CONTRACTING Sub- Contracting implies hiring another firm to

perform some of the manufacturing process or to give sub-assemblies that will be included in the finished product.

Sub-Contracting helps the firm to concentrate on it’s core biz area and thus it can grow.

Overall Growth Strategies Summarization

Alternatives for Growth

Expansionof existingBusinesses

Diversificationinto new Businesses

Market PenetrationMarket DevelopmentProduct Development

VerticalIntegration -Forward & Backward

Related

Unrelated

Crisis of Business Growth

Business Growth

Financing Growth

Financing GrowthCrisis To grow a firm needs to be able to expand – plant,

equipment, buildings, human resources, etc. To do this it needs to acquire finance Crisis may arise if it fails to generate the required

finance needed to do the business.

External Growth

Difference in work ethics and culture may result takeovers, mergers and buyouts not to work correctly resulting in a crisis.

Managing Growth

Managing Growth

Businesses are human organisations – humans are difficult to manage!

Larger organisations may suffer from diseconomies of scale

Larger organisations may necessitate changing roles for the managers/leader/owners

There may be a divorce between ownership (the shareholders) and control (the Board)

Thank You