6
Business Growth
and Strategy
Strategic management
strategic and day-to-day management
the components of strategic management
strategic analysis
strateg...
Strategic Analysis
Porter's five forces model
the five forces
the bargaining power of suppliers
the bargaining power of bu...
Industry competitors
Porter's Five Forces Model
Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing I...
Industry competitors
Rivalry among
existing firms
Porter's Five Forces Model
Source: Michael E. Porter Competitive Strateg...
Potential
entrants
Industry competitors
Rivalry among
existing firms
Threat of
new entrants
Porter's Five Forces Model
Sou...
Substitute
products
Potential
entrants
Industry competitors
Rivalry among
existing firms
Threat of
new entrants
Threat of
...
Suppliers
Substitute
products
Potential
entrants
Industry competitors
Rivalry among
existing firms
Threat of
new entrants
...
BuyersSuppliers
Substitute
products
Potential
entrants
Industry competitors
Rivalry among
existing firms
Threat of
new ent...
Strategic Analysis
Porter's five forces model
the five forces
the bargaining power of suppliers
the bargaining power of bu...
Strategic Analysis
Porter's five forces model
the five forces
the bargaining power of suppliers
the bargaining power of bu...
Strategic Analysis
Value chain analysis
nature of value chain analysis
primary activities
inbound logistics
operations
out...
Inbound
logistics
The value chain
Operations
Outbound
logistics
Marketing
and sales
After-sales
serviceFirminfrastructure
...
Strategic Choice
Environment or market-based strategy
types
cost leadership
differentiation
focus
importance of establishi...
Growth by internal expansion
product differentiation
vertical integration
diversification
Growth by external expansion: me...
Alternative growth strategy
GROWTH OF A FIRM
Internal expansion External expansion
(1) Differentiation
Horizontal expansio...
Growth Strategy
Growth by internal expansion
financing internal growth
borrowing
share issue
ploughing-back profit
the tak...
Growth Strategy
Growth by internal expansion (cont.)
growth through vertical integration
backward integration ('upstream' ...
Growth Strategy
Growth through mergers and takeovers
types of merger and takeover
horizontal
vertical
conglomerate
motives...
Financing Growth and Investment
Sources of business finance
internal sources
ploughed-back profit
external sources
banks
•...
The role of the Stock Exchange
primary market
secondary market
advantages
brings together savers & firms seeking finance
r...
Is the stock market efficient?
the efficient market hypothesis
share prices reflect information about
companies' current a...
Staying Small
EU definition of SMEs
by number of employees
micro enterprises
small enterprises
medium enterprises
by turno...
EU SME definitions
EU SME definitions
EU SME definitions
EU SME definitions
Staying Small
Competitive advantage and small firms
flexibility
quality of service
production efficiency and low overheads...
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Busgrowth

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  • Busgrowth

    1. 1. 6 Business Growth and Strategy
    2. 2. Strategic management strategic and day-to-day management the components of strategic management strategic analysis strategic choice strategic implementation Importance of the business environment PEST analysis Strategic Analysis
    3. 3. Strategic Analysis Porter's five forces model the five forces the bargaining power of suppliers the bargaining power of buyers the threat of potential new entrants the threat of substitutes the extent of competitive rivalry
    4. 4. Industry competitors Porter's Five Forces Model Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)
    5. 5. Industry competitors Rivalry among existing firms Porter's Five Forces Model Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)
    6. 6. Potential entrants Industry competitors Rivalry among existing firms Threat of new entrants Porter's Five Forces Model Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)
    7. 7. Substitute products Potential entrants Industry competitors Rivalry among existing firms Threat of new entrants Threat of substitutes Porter's Five Forces Model Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)
    8. 8. Suppliers Substitute products Potential entrants Industry competitors Rivalry among existing firms Threat of new entrants Bargaining power of suppliers Threat of substitutes Porter's Five Forces Model Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)
    9. 9. BuyersSuppliers Substitute products Potential entrants Industry competitors Rivalry among existing firms Threat of new entrants Bargaining power of suppliers Bargaining power of buyers Threat of substitutes Porter's Five Forces Model Source: Michael E. Porter Competitive Strategy: Techniques for Analyzing Industries and Competitors, (The Free Press, 1980)
    10. 10. Strategic Analysis Porter's five forces model the five forces the bargaining power of suppliers the bargaining power of buyers the threat of potential new entrants the threat of substitutes the extent of competitive rivalry factors affecting each of the forces
    11. 11. Strategic Analysis Porter's five forces model the five forces the bargaining power of suppliers the bargaining power of buyers the threat of potential new entrants the threat of substitutes the extent of competitive rivalry factors affecting each of the forces limitations of the five forces model
    12. 12. Strategic Analysis Value chain analysis nature of value chain analysis primary activities inbound logistics operations outbound logistics marketing and sales service secondary activities procurement technological development human resources management firm infrastructure
    13. 13. Inbound logistics The value chain Operations Outbound logistics Marketing and sales After-sales serviceFirminfrastructure Technological development Humanresource management Procurement
    14. 14. Strategic Choice Environment or market-based strategy types cost leadership differentiation focus importance of establishing:- the basis of a firm's competitive advantages the nature of the target market Resource-based strategy exploiting core competencies defining & establishing core competencies
    15. 15. Growth by internal expansion product differentiation vertical integration diversification Growth by external expansion: mergers and takeovers horizontal mergers vertical mergers conglomerate mergers Growth Strategy
    16. 16. Alternative growth strategy GROWTH OF A FIRM Internal expansion External expansion (1) Differentiation Horizontal expansion (same product, increase in market share) (1) Horizontal integration Mergers of firms producing the same product (2) Vertical integration Different products, but belonging to different stages of same product (2) Vertical integration Mergers of firms producing at different stages of same process (3) Conglomerate Diversification - introduction of totally different products (3) Conglomerate Diversification - merger of firms producing totally unrelated products
    17. 17. Growth Strategy Growth by internal expansion financing internal growth borrowing share issue ploughing-back profit the takeover constraint
    18. 18. Growth Strategy Growth by internal expansion (cont.) growth through vertical integration backward integration ('upstream' integration) forward integration ('downstream' integration) why vertically integrate? economies of scale reduced uncertainty monopoly power • barriers to entry growth through diversification advantages • when existing market is saturated • spreads risks
    19. 19. Growth Strategy Growth through mergers and takeovers types of merger and takeover horizontal vertical conglomerate motives for mergers and takeovers growth economies of scale monopoly power increased market valuation reduced uncertainty other motives effects of mergers on consumers
    20. 20. Financing Growth and Investment Sources of business finance internal sources ploughed-back profit external sources banks • mainly short- and medium-term finance stock market • longer-term finance problem of 'short-termism' international sources
    21. 21. The role of the Stock Exchange primary market secondary market advantages brings together savers & firms seeking finance regulates firms and helps encourage confidence facilitates mergers and takeovers reduces transaction costs of investment finance disadvantages cost of getting listed possible short-termism and instability Financing Growth and Investment
    22. 22. Is the stock market efficient? the efficient market hypothesis share prices reflect information about companies' current and expected future performance implications of stock market efficiency benefit of speculation diminishes as efficiency increases perfect efficiency and share prices following a 'random walk' Financing Growth and Investment
    23. 23. Staying Small EU definition of SMEs by number of employees micro enterprises small enterprises medium enterprises by turnover
    24. 24. EU SME definitions
    25. 25. EU SME definitions
    26. 26. EU SME definitions
    27. 27. EU SME definitions
    28. 28. Staying Small Competitive advantage and small firms flexibility quality of service production efficiency and low overheads product development and innovation Problems facing small businesses selling and marketing funding R&D management skills less ability to gain economies of scale
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