Growth Strategy & Direction


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Growth Strategy & Direction

  1. 1. Growth Strategy & Direction Whitepaper Vinay Srinivasan vinay.srinivasan@techmahindra.com10th Annual International
  2. 2. Software TestingConference in India 2010Growth Strategy & Direction By Page 2 of 14 Vinay Srinivasan
  3. 3. AbstractThe purpose of this Whitepaper is to Understand the Nature of Strategy for Growth, thenidentify the Keys for Growth, to analyse the Forces Affecting Growth, to provide ideas ondeveloping a Strategy for Tailoring Growth in IT Industry, to draw an Analogy betweenNatural and Generic Growth Strategy, to find out the Steps Towards Growth Strategy andAreas for Growth in IT Industry and to work out on the Directions for Growth includingOptimistic Growth Strategy Models.1. Nature of GrowthGrowth is a Time Bound Activity and it is a measurable Quantity. For the Industry Sector itcan be considered as Increase in Strength, Opportunities and Revenue over a period of Timeand it can be specific to a Region. Here Capital Investment, Intellectual Capital, Resources,Assets, Technology, Skills, Competency can be Considered as Strength. Markets, Stocks,Domains, Technology can be considered as Opportunities. Income from Turnover or Incomefrom Sales, Services, Appreciation, and Increase in Stock value or other sources hasmonetary values and can be considered as part of Revenue.2. Growth StrategyIn General a Strategy determines the ways for reaching a particular Target and to achievethe Goal. In the case of a Growth Strategy, it identifies the Keys for Successful Growth,Steps towards Growth, determines the ways of building or utilizing those Keys and toachieve the Growth (Directions). A Growth Strategy can be Generic but it will be better ifthe Nature and Type of the Industry/ Domain, its Proposed/Existing Products or Areas ofServices or Both are known in advance. For example let us consider a Human Embryo, itcontains the Key Genetics for the Successful Growth into a Full fledged Human Being,Likewise it is the same case with that of Seed of a Grass or a Tree. Here the Kernel of theseed contains the Key Genetics for the Successful Growth into a Grass or a Treerespectively. Similarly Let us consider an IT Organization; it should have the Key FactorsAssisting the Growth and the Areas of Specialization like Application Programming, SystemDevelopment, Software Testing, Best Practices and Process and so on to Grow into a desiredIT Organization. This Growth Strategy is very similar to the Strategy as can be found inNature in the form of Growth of a Tree.3. Keys for Growth:3.1. Developing Knowledge, Intelligence, Wisdom, DecisivenessKnowledge is the know-how developed by processing available data and information. It canbe said to be borne out of Studies and Understanding or by Intellectual Means or by meansof Experience gained through Practice or by Transfer of Know-How with the guidance fromother persons possessing knowledge. Intelligence is borne out of Knowledge, based on thecollected Facts and Figures, Events and Forecasts and judgment on the Outcome. Wisdom isdeveloped when the Knowledge Matures and Realisation occurs on real world things.Wisdom is useful for developing Insight, for Foreseeing Things that might happen and forMaking Wise Decisions. Decisiveness means taking the Right Decisions, to be ready to facethe Outcome of the Decisions and to be conclusive on what needs to done. Thus we can saythat Intelligence, Wisdom and Decisiveness are all derivatives/products which arise whenKnowledge is Cultivated or Grown in the form of a Tree. In case of a Tree, itself including itsSeed will have the Knowledge on How to grow its Roots, Trunk, Branches, Twigs and Leaves Growth Strategy & Direction By Page 3 of 14 Vinay Srinivasan
  4. 4. and so on. Likewise in case of an IT Industry itself, consisting of its Board of Directors, TopManagement/ Executives including the Staffs should have knowledge on how to increaseStrength, Hunt for Opportunities, Grow the Business and thereby earn more Revenue andresulting in Overall Growth of the Industry. Similarly Intelligence, Wisdom and Decisivenessare cultivated from Knowledge in both the cases of the Tree and the IT Industry. HenceKnowledge can be considered as the Master Key to the Treasure for the Growth and forthe Growth Strategy itself.3.2. StrengthStrength is like a Stimulus or Force or Will Power or Confidence which provides theOpportunity for Growth. In case of a Tree, to begin with the Seed is its Strength. This seedis what will germinate into Stem, Leaves, Roots, then later grow into a Tree and it is similarto an established Capital. As the Tree Grows it will develop Trunk, Branches, Twigs, Leavesand Propagate its Roots. Likewise in the case of an IT Industry, the Cash brought in asCapital is its Seed of Strength. Then using this Capital it Creates Assets, Develop Skills,Resources, Develop/ Acquire Technologies, Propagate its Growth by means of Production, byRendering its Services, by Marketing and thus increase its Revenue which all adds up to itsStrength. Strength is like the Key to the Potential for Growth.3.3. Creating Innovation, InventionInnovation is the Idea/Concept/Science which revolutionizes the development of newPrinciples from the beginning or from the existing old ones and the application of thatPrinciple to meet the requirements. The Main purpose of innovation is to reduce the effortinvolved in doing a Task or to reduce the Time required for obtaining a Solution. The AppliedPrinciple which results in the development of a Solution or Technology is termed asInvention. In one way Inventions can be treated as derivatives of Innovation. For Examplein the case of Trees some of them have the innovation of developing Toxins, Hard shellaround the Seed Kernel, able to develop Wax Coating around the Leaves to protectthemselves, to withstand certain temperature and climatic conditions, are able to grow inhilly regions and rocky areas as their roots are able to penetrate deep inside the solidsurface and so on. Here the Toxins, Hard Shell, Wax Coating etc, can be considered asInventions. Likewise in the case of an IT Industry, let us consider the example of ClientServer Technology. Here earlier there was a concept of using Thick Clients which were ofstandalone in nature and required the Client to be installed at the point of access. At thisstage an Innovation occurred on an Idea for the purpose of extracting Texts and later onImages from various different servers and submitting the data back to the connected Serverusing a Single Universal Client. This Innovation resulted with the invention of Browsers, andalso became the Innovation of using it as a Thin Client. The usage of Thin Client was fasterand dynamic as compared to the Thick Client and has a very wide acceptance. Thus,Innovation and Invention are like Key to the Brains for Growth.3.4. Developing Competitiveness/ Leadership/ Domination:Competitiveness is the Ability or Strength of an Individual or a Group or an Organization toperform well in Challenging Situations or possess the Capability to compete with others. Ifan Individual or Individual among a Group or Organization can excel in Competition for aspecific area or field or an identified collection of Roles/Tasks and also possess capabilitiesto Guide others in those areas, then that Individual or Organization can be considered topossess leadership tendencies/ characteristics. If the Individual or the Organizationpossessing Leadership characteristics tend to Overcome Competition from Others withoutmuch resistance and with much ease or try to rule out competition from others and subjectthem to their own Authority/Rule/Mercy then they are said to possess Dominationtendencies/characteristics. Here for Example we can say that it is Good to be Competitive Growth Strategy & Direction By Page 4 of 14 Vinay Srinivasan
  5. 5. Like a Tiger because of its Competitiveness in getting its share of prey, Good to be a Leaderlike a Lion because it excels in Competition among the Wild Cats, Good to be in Dominationlike a Shark because of its Domination in its area which is the Seas. In the case of a Tree itis only competitive in Growth towards lights and towards source of water. Likewise, in thecase of an IT Industry, for example, Microsoft Windows, Apple Mac, Linux and UNIX are themain competitors for the Desktop Operating System, while here Microsoft is having themajority of the Market Share and can rightly be considered as a Leader in the DesktopOperating System Market. For another example, Let us consider an example of variousSport Events, Here if Individuals or Group participate in an Event, say like Running Race andtry to win the Race then they can be considered as competitors and if an individual who wona Race Event also wins in other Race Events, then that Individual can be considered asLeading those Race Events or as a Leader of those Race Events. Similarly if an Individual ora Team or a Particular Participating Country wins in majority of the Sport Events of a Year,then we can consider that Individual or that Team or that Country has dominated the SportEvents for that Year. Similarly in the case of IT Industry, any major IT Player/ Industry whoholds a major share in a market for a particular Product or particular Service can beconsidered to be dominating in that area. Thus Competitiveness is like the key toAchieve Success in Growth.3.5. Undergoing Specialization/ Selecting Niche AreasSpecialization means learning and developing Skill in certain Type of Work or a particularField or Subject in a Branch of Science or Engineering. It can also be regarded as carryingout Tasks of Specifically Assigned or Developed Functionality. While Niche Areas are verySpecial Areas or Segment in Specific Field of work which are difficult to undertake byOrdinary means and are high in Demand. For Example in case of Trees, certain Trees haveSpecialization in the form of Prop Roots, which grow from the Branches towards the Earthand function as to provide Support and Nourishment and in some other Special cases theRoots have ability to store food and some have ability to initiate Growth on their own.Likewise in the case of IT Industry, Specialization exists in the areas like Security,Intelligence Mapping, Data Mining, Embedded Systems, Real-time Operations, Touch ScreenTechnologies and Visual Programming and so on. Specialization is the Key to exploreSpecific Areas of Growth.3.6. Improving Talent/ SkillTalent is the Special Ability or Potential or Flair to perform particular Tasks successfully. ForExample a person can possess natural Talent in Singing or Painting, etc. Likewise personscan have Talent in Development, Software Testing and Design and so on. Skill is said to bedeveloped when the ways of performing a Task are studied and the Task is accomplished ina continuous improvement process. A Person who is studying or Learning the ways of doinga Job or Task is known as a Novice. If the Novice improves his or her Skill based onExperience and develops Accuracy in Performing Tasks correctly then that person is said tobe a Professional. If a Professional improves his or her Skill to a Greater extent and iscapable of performing the Tasks right at the First Time itself, then that Professional can beconsidered to be an Expert. For Example in the case of a Tree, the Leaves posses the Talentin performing Photosynthesis, the Roots possess the Skill to find out the Sources and Areaof water and grow towards them. Likewise in the case of an IT Industry, Skill is available inthe form of Programming, Testing, Networking and Administration and so on. Thus Talent/Skill are like the key to make Progress Work towards Growth.3.7. AssetsAssets are items with economic value and which can be converted to Cash. Assets includeCash, Cash Equivalents, Short Term Investments, Amount Receivables, Prepaid Expenses, Growth Strategy & Direction By Page 5 of 14 Vinay Srinivasan
  6. 6. Inventory, Investments, Fixed Assets, Tangible Assets and Intangible Assets. For Examplein the case of a Tree its Assets are its Roots, Trunk, Branches, Twigs and Leaves. Likewisein the case of an IT Industry the Assets are Cash in Hand, Capital, Investments, Knowledge,Clients, Infrastructure, Computers, Laptops, Hardware, Software, Patents, Vehicles etc.Possessing Appropriate Assets is like having Key to the Foundation and Support forGrowth.3.8. ResourcesAnything which meets the Requirement of a Job or Task or towards Growth itself can beconsidered as a Resource. Resources may be available in Limited Quantity meaning thatwhen they are exhausted they might no longer be available until they are replenished. Forexample consider a Growth of a Tree; it requires Fertile Soil, Water, Oxygen and Sun Lightas Resources. Likewise for an IT Industry it requires Skilled People, Cash, Plans, Work,Electricity, Work Space, Software, Hardware, and Work Environment as Resources. But inmost of the cases only People are considered as Resources and they are referred to asHuman Resources. Possessing Adequate Resources means like having a Key to theUtilities for Successful Growth.3.9. TechnologyTechnology is an Outcome which arises when Specific Science Principle is put into Practice.The Outcome can be a Technique or a Tool which can help or complete a Specific Task. TheTask of applying an Innovation or Engineering a specific Science Principle to develop anApplication or Tool is known as Technology Creation or Technology Development. ForExample Grass, Plants and Trees possess Chlorophyll which is like a Tool/ Technologyparticipating in Photosynthesis for Food Production. Similarly roots possess CapillaryTechnology which acts as a Tool to absorb water from the Earth. In case of a GenericIndustry Technology is like a Tool which is useful for performing the Tasks and improvingProductivity. Industries can have primitive or moderate Technology or Advanced Technologybut still the ones with primitive or moderate can survive but may find it difficult to Competeand Sustain Growth. Industries with Advanced Technologies will be able to Compete andalso Sustain Growth at a Faster Rate. In the case of an IT Industry, for example in thesoftware segment it can use programming languages like C++, Java, C# etc., Architecturelike Client Server, SOA, Cloud Computing, Operating Systems like Windows, Unix, Linux,AIX, Mainframe, Embedded OS, Real Time OS, etc., and Databases like Oracle 11g, MS-SQL2008, MySQL, PostGreSQL, Derby, etc., as Technology for developing Products/ Applicationsor for rendering its services towards Software Design, Development, Testing and otherAllied Areas. Possessing Appropriate Technology means like having a Key to the Musclesfor Growth.3.10. QualityQuality is like a Perception in that it means that it may differ from one Person to anotherPerson and also can be based on a mutually accepted standard. It can be said to satisfyFactors like: Ease of Use, Appealing Look, Stability, Consistency in Performance, Meets userRequirements etc. For Example in the case of a Tree its Quality can be viewed based onFactors of its Growth like: its Type, Trunk Size and Strength, its Greenery, its Height, itsBranches, its Roots etc. Other than this Quality of a Tree can also be determined by theQuality of its Fruit and Seed. Here these Factors of Quality for Growth depend on theGenetics Material in the Seed Kernel. If the genetics are damaged or not proper or if theResources are not properly available, then Seed may not germinate or may have a stuntedor abnormal growth. Likewise in the case of an IT Industry the Quality can be determinedby the Factors of its Growth like: Quality of its Infrastructure, Availability and Level ofSkilled Resources, Quality of its Processes and Practices, Quality of the Product, Quality of it Growth Strategy & Direction By Page 6 of 14 Vinay Srinivasan
  7. 7. Services. Considering these we can say that Quality of its Infrastructure, Skilled Resources,Processes, Practices, Product and Services will determine the Quality of Growth in theIndustry. Here the Quality of Resources, Processes, Practices, Products and Services arevery crucial. The Quality of the Resources can be improved by means of Training, impartingeducation in areas of work demanding high level of skill sets. The Quality of the Processescan be improved based on the analysis of outcome when the process is used, feedback andImplementation of the Audit Recommendations. The Quality of the Practices can beimproved based on its review. The Quality of Product and Services can be improved byQuality Control (Verification Techniques) and Quality Assurance (Validation Techniques).Quality is like a cultivation process and improved Quality will be like a Key to PromoteGrowth.3.11. Brand, Brand Image & MarketingBrand is like an Identity. Brand Image is like a view or opinion as perceived by others. Forexample an Image of a Tree may appear as Tall, Strong, Lush Green, providing Shelter, Actas a Carbon Sink, Provide Oxygen, Fruit yielding etc. People, Birds and Animals will viewthat their association with the Tree as more beneficial and may Like, Trust and Rely on itbecause of its contribution to the Ecological balance and Environment like Shelter, LifeSupport in the form of Oxygen, Fruit bearing abilities. Likewise in the case of an IT IndustryBrand Image helps to gain Popularity, win Trust among its clients and will be helpful forMarketing. Marketing is an Action by which Industries render the sales of their Product andServices and earn Revenue. For Example in the case of a Tree, the Roots are similar toMarketing, in that they draw resources like waters, minerals etc, as required for its growth.Similarly, in the case of an IT Industry, Marketing promotes Brand Image throughAdvertisement, Client Interactions, identifies and pulls the Sources of Opportunities andRevenue, undertakes Sales and initiates Work Engagements. In the overall Brand, BrandImage & Marketing are like the Key to Pull Appropriate Sources for Growth.3.12. OpportunitiesOpportunities are like circumstances which are in favour. It can be like the NaturalEnvironment or Climate or Seasons, Space for Propagation with adequate Resources. On thecontrary Unfavourable circumstances will lead to lack of Opportunity. For example in thecase of a Tree, it can have opportunities of Nature like Open Space, Seasons, Weather,Climate, Environment, and to grow by the source of light, grow its Branches, its Twigs, itsLeaves, its roots in various possible directions and bear fruits and propagate its seeds.Likewise, in the case of an IT Industry it can have its Opportunities, in various areas likeImproving its Infrastructure, Product/ Application Development using C++, Java, VC++,C#, VB etc, providing Services like Source Code Development, Technical Solutions,Designing Architecture, Testing, Improving Quality, including that of Market Segments likeService Marketing, Product Marketing, Stock Trading, Work in the areas of Domains likeBanking, Insurance, Telecom, etc,. When the Opportunities are handled properly, they yieldFruits of the effort/work in the form Projects, Revenue, etc. The Opportunities are like theKey to the Requirements for Propagating Growth.3.13. RevenueRevenue is the Income gained by selling Products/ Services. For Example in the case ofTrees they Trade in Carbon Dioxide, synthesize Sugar using Carbon Dioxide, Chlorophyll,Sunlight and releases Oxygen. Here the Sugar is the Revenue for the Tree. Likewise in thecase of an IT Industry it Trades in the Opportunities which are source for the work, or thework by itself, Deliver Products or Services or both synthesized using the Resources, Assetsand earn Cash for it. Here Cash is the Revenue for the IT Industry. Revenue is like a Key to the Life for Growth. Growth Strategy & Direction By Page 7 of 14 Vinay Srinivasan
  8. 8. 3.14. CommunicationCommunication is a means of exchanging information or data. For Example in the case of atree the communication takes place in the form of transportation of food, minerals, water,oxygen, ion exchange, etc. This happens between the Tree leaves, its twigs, its branchesand roots. Likewise in the case of an IT Industry the communication happens between itsStaffs, Management, Executives and its Client etc. The communication should be Reliable,Significant and Strong and it is like a Key to the Reliable Input for Growth.3.15. ManagementManagement are the means of controlling the Utilization of Resources, Assets which aregrouped into Groups or Teams in terms of some Hierarchy. For Example in the case of aTree the Trunk manages the Roots, Branches. The Branches in turn manages the Twigs,which in turn manages the Leaves. Here, in this case, we can consider this type ofManagement to be hierarchically similar to a Pyramid Form. Likewise in the case of an ITIndustry there are the Board of Directors and the CEO who mange the Top/ ExecutiveManagement and who in turn manage the Branches/ Delivery Units and the Other SeniorManagers. The Senior Managers in turn manage the Middle Managers who again in turnmanage the Large Groups. These Large Groups consists of several Teams which are in turnmanaged by the Team Leads. The Management is essential for taking crucial decisions thataffect the Growth and can considered as the Key to Leadership and Control for Growth.4. Steps Towards Growth:4.1. Value PropositionValue needs to be proposed for Growth by determining the ratio of the Growth Benefits tothe Cost for the Growth. This Value Proposition for the Growth will help to determinewhether the Growth till certain stage or beyond it will be beneficial or not. If the Benefitsoutweigh the Cost then the Growth can be progressed and if the Costs outweigh the Benefitthen the Growth will have to be stopped and saturated at that particular stage.4.2. Determining Profit & LossProfit & Loss needs to be determined for the proposed Growth by simulating a FinancialStatement for the Industry indicating on how much Revenue can be expected, what will bethe Costs and Expenses and how the Revenue will be transformed into Net Income afterdeducting the Cost and Expenses. If there are proposed Profit then the Growth should beinitiated else if Loss is foreseen then the Growth should not be initiated.4.3. Proposed Return of InvestmentProposed Return of Investment (ROI) is calculated as the difference between the Incomes tobe gained to the Investment to be made. The proposed percentage Return of Investment iscalculated as the difference between the Incomes to be gained to the Investment to bemade, divided by the Investment to be made. The Better the ROI, Better will be theprospects of the Growth.4.4. Analysis of Vulnerabilities and RisksAs an Industry continues to Grow, it will be prone to develop Vulnerabilities and may getexposed to higher Risks. For Example the Vulnerabilities can include Diminished Capital,Depreciation of Assets, and Low Stock Values and so on. On the other hand the Risks caninclude Reduced or Loss of Opportunities, Loss of Revenue, High Wage Demands, and HighAttrition and so on. Here the Vulnerabilities are an outcome of Weakness and are caused by Growth Strategy & Direction By Page 8 of 14 Vinay Srinivasan
  9. 9. internal Factors and they can be overcome, while the Risks are an outcome ofVulnerabilities, Known Factors and Unknown Factors which can be either internal or externalor both and the Risks can only be minimized. A Study/ Analysis of these Vulnerabilities andthe Risks should be undertaken so as to determine their Impact on the Growth and ways toovercome or minimize them. This will be crucial in deciding on the progress of Growth.4.5. Analysis of Strengths, Weakness, Opportunities and ThreatsStrengths, Weakness, Opportunities and Threats are the Forces that affect the Growth.Strengths can include Capital Investment, Intellectual Capital, Resources, Assets,Technology, Skills, Competency, Confidence, Willpower and Motivation. Strengths should beanalysed to determine whether they meet the potential for the Growth or not. The more isthe Strength the more will be the Potential for the Growth and otherwise the less is theStrength the less will be the Potential for the Growth. On the contrary Weakness is theOpposite of Strength. It can include Diminished/Less/Inadequate Capital, Lack ofknowledge, Lack of Skilled Resources, Inappropriate/ Highly Unfit/ Highly DepreciatedAssets, Out Dated/ Phased Out/ Unfit Technology, Incompetency, Distrust, Lack ofConfidence, Lack of Willpower. The Weakness should be analysed to determine whetherthey outweigh the Strengths or not. When the Weakness is more than the Strength it isbetter not progress with the Growth. When considering Opportunities, they can includeMarkets, Domains, Stocks and Technology. The Opportunities should be analysed todetermine the circumstances favourable for Growth. If the circumstances are favourablethen it will aid the Growth and if they are unfavourable then it will block the Growth. In thecase of Threats, they are like external Forces and can include Rivalry, New Entrants,Alternatives, Change in Technology, Government Policies, Socio Economic and PoliticalFactors, Natural Calamities and Disasters, etc. The Threats should be analysed so as todetermine their Nature and Impact on Growth. If the Threats are severe they will affect theOpportunities to a greater extent and the Revenue will reduce. To reduce the impact of theThreats, the Strength will have to be increased and may have to wait till the Opportunityimproves. If the Threats are mild then increasing the Strength alone might be sufficient.4.6. Areas for GrowthAreas for Growth of an IT Industry in Software side can consist of areas like SystemSoftware Development, Application Software Development, Embedded Systems, OperatingSystems Development, Product Software Development, Software Testing, DatabaseDevelopment, Intelligence Mapping, Data Mining, Performance Engineering, ProcessEngineering, Service Oriented Architecture, Touch Screen Technologies, VisualProgramming, DNA Computing, Artificial Intelligence, Avionics, Cloud Computing,ecommerce, Electronic-Security, Network Programming, Neural Networks, WebProgramming, Communication Systems, Mobile Telephony, Biometrics, Operational SupportSystem, Decision Support System, etc, and for Domains like Banking, Insurance,Investments, Law, Transportation, Shipping, Logistics, Petroleum Industry, Defence,Aerospace, Space Research, Healthcare, Sanitation, Water Works, Public Administration,Telecom, Media, Radio, Television, Manufacturing, Automobile, etc, and for communities likeOpen source and Freeware, etc and for Setting up the Centre of Excellence in Areas ofCoding, Testing, etc.5. Directions for Growth:5.1. Incremental Growth (Model) Growth Strategy & Direction By Page 9 of 14 Vinay Srinivasan
  10. 10. Figure 01 Incremental GrowthIn the above Figure 01 the Incremental Growth varies (increases or decreases) for specificvariations in the strength, the Opportunity and the Revenue. The Growth navigates acrossvarious points in the form of a Logistic Sigmoid Curve. This can be in the form of variousups and down (Crests and Troughs) in the graph for a spread of certain specific span. TheRevenue from Growth may fluctuate and it may increase or decrease at certain pointsdepending on the Opportunity and it may also remain constant for certain points where theStrength and the Opportunity are Constant. The Revenue adds up for each growth points assmall or large increments. For Example the Grass, Creepers, Twines, excluding other treeswith exception of trees like the Coconut Tree, Palm Tree etc, can be considered as Betterexamples of Incremental Growth. Likewise in the case of an IT Industry, the Industries withsmall Capital, Restricted Specialisation, Less Resources, Less Opportunities, and LessRevenue follow Incremental Growth.5.2. Cumulative Growth (Model) Growth Strategy & Direction By Page 10 of 14 Vinay Srinivasan
  11. 11. Figure 02 Cumulative GrowthIn the above Figure 02 Cumulative Growth, as the Strength (eg. Strength 01) and theOpportunity of Growth (eg. Growth 01) increases, upto a certain point where the Strengthwill be intersecting the Growth for developing a particular product or rendering a serviceoffered for a particular Opportunity like specific domain, market etc. At this intersection theOpportunity would have reached a limit and the Growth will have to be saturated upto thatpoint. The Area of Growth will be between the Strength Curve and the Growth Curve. TheRevenue from this Growth in complete or some portion of it along with additional Cash canbe used to start another Growth for another Product or Service offered for anotherOpportunity, in parrallel or as a new one. Here the Growth (eg. Let us say like Growth 02)can be larger than the previous Growth and will encompass/ contain it. Like this we cancontain the Growth, till the maximum Growth (eg. Let us say like Growth 05) upto the limitof the maximum Opportunity or till its saturation is reached. The Growth will have to belimited upto the maximum limit of the Opportunity or else trying to Grow further may resultin loss. Like this the Growth will occur for various Opportunities and will grow outwards likea tree encompassing other inner Growths. Here the Strength of the other Growth can beused as the Strength addup for another Growth. By this way the Strength from differentGrowth can be grouped and developed further and can be used to Train other Resources togain additional Strength, work together with other Teams and gain the Strength in otherOpportunity Areas of Work. For Example in General a Tree has a Cumulative Growth Model.Here the Growth progresses Outwards towards the source of Light in many directions witheach addition of the Branches, the Twigs, the Leaves, Increase in the Thickness of the Bark,the Trunk and the Propogation of the root towards the source of Water, Minerals etc. Growth Strategy & Direction By Page 11 of 14 Vinay Srinivasan
  12. 12. Likewise Strong IT Industries also Grow Cumulatively by increasing their Strength intermsof their increase in Capital, Assets, Infrastructure, Spread across Geography, Resources,Propogate towards existing, new Opportunities like Markets, Technology and increase inRevenue.5.3. AlignmentAlignment is a process by which Adjustment or Orientation of certain Growth Areas takesplace. Alignment can be in the form of Horizontal and Vertical Alignment. The HorizontalAlignment provides increase/expansion/spread/widening in Shape, Strength to Bear, Hold,Distribute and Balance the weight, while the Vertical Alignment provides Growth. Forexample in the case of a Tree it has both the Horizontal and the Vertical Alignment. TheVertical Alignment is in the form of growth towards the Source of light is in the form ofTrunk, Branches, Twigs, Leaves and another towards the earth, along with the Gravity butagainst the source of light, in the form of Roots growing towards the source of water,minerals, etc. The Horizontal Alignment is in the form of spread of its Branches, Leaves,Roots and the expansion/ increase in width of its Trunk, Branches and Roots, etc, in theHorizontal Direction. Likewise in the case of an IT Industry the Horizontal Alignment is in theform of Domains like Banking, Insurance, Embedded Systems, VLSI, Aerospace, Telecom,Networking, ecommerce, CRM, HRMS, etc. On the Other Vertical Alignment is in the Form ofCapital, Infrastructure, Skill, Resources, Technology, Development, Testing, Products/Applications, Services, Support and Maintenance, etc. These Horizontal and VerticalAlignments of the IT Industry grow along with and towards the direction of Opportunities.Other than this, there are other similar Horizontal and Vertical Alignments for the ITIndustry like Brand, Brand Image and Marketing which are like Roots and grow along withand towards the direction of Marketing.5.4. FocusedFocused Growth happens when there is a concentrated uniform Alignment. For Example aTree can have uniform Horizontal Alignment and can have an increasing Vertical Alignment.The Best Example for this type is the Coconut Tree, the Palm Tree and the Plantain Tree,which have Focused Growth in only one direction. Likewise in the case of an IT IndustryFocussed Growth takes place when there is only one or more concentrated uniformHorizontal Alignment, say like Banking alone or Banking, Insurance, Telecom and Have oneor more Vertical Alignments like Testing alone or Development and Testing Alone and so on.5.5. DiversifiedDiversified Growth means the Growth in different Areas or Segment. The Diversified Growthhappens when different Areas are focused for the Growth. For Example in the case of Treesthere are different varieties of trees of same kind, different kind, with diversified branches,different varieties of Fruits and so on. The Best Example for a different variety but samekind is a Mango tree and for different variety and different kind can be a Mango, Apple treeand including other trees. Likewise in the case of an IT Industry there are different varietiesof Products/ Application/ Services of same Opportunity, different Opportunity, sameTechnology, different Technology, same Domain and different Domain and so on. Also theDiversified Growth can also include IT and Non IT industries. The purpose of the DiversifiedGrowth is to Increase the Revenue and support for other Branch or Child or Sibling units,when there is a Loss or Lack of Opportunity or Diminished Cash and so on, and so as tomake it to recover towards its normalcy.5.6. Uniqueness and DifferentiationUniqueness means being of only one of its Type and Differentiation means havingdistinguishing features as compared to the others of its Type. Uniqueness in case of a Tree Growth Strategy & Direction By Page 12 of 14 Vinay Srinivasan
  13. 13. is that it can be of a particular Type/ Variety and its differentiating features are like its Type,Height, Weight, Span, Leafs, Strength, Flowers, Fruits, and Seeds. Uniqueness in case of ITIndustry is its Type like that of a Software Product Industry or as a Software ServicesIndustry, etc. Its differentiator are the variety of its products offered by the IT industry likeSAP, Siebel, Oracle DB, Windows OS, MAC OS, AIX, Unix etc., and services like SoftwareDevelopment, Software Integration Testing, Software Functional Testing, SoftwarePerformance Testing etc. Uniqueness and Differentiation are like Facts which are helpful todistinguish one Type of Nature and identify various Traits, Tendencies, and Aspects of Work.5.7. Internal GrowthInternal Growth means the Growth in Strength like Skill, Technology and Quality, etc., asincreased for each of its Branch, its Projects and its Resources. For Example, it is likeinternally increasing the Growth (Shape and Strength) of a Tree in term of its Roots, Trunk,Branches, Twigs and Leaves. In case of IT industry Internal Growth happens in terms ofdeveloping the Skills of the IT Resources, Increasing the Strength of available Resources byhiring new Resources and Training them, Improving the Financial Positions by increasing theCapital, Pooling the Revenue/ Income towards Capital, Strengthening the Domain levelexpertise, Improving Marketing Skills, Improving Quality Continuously, Conducting frequentAudits to verify them and achieving high rate of Customer Satisfaction, Conducting frequentSeminars, Workshops.5.8. RestructuringRestructuring is the Act/ Process of Re-Organising the structures so as to prevent a collapseof the structure or to minimize Damage or to Prevent Loss or to Recover from Loss or toRecover from Unfavourable Circumstances and to Promote Re-Growth. For example in caseof a Tree, when the Opportunities like Environment, Weather, Climate, Seasons and Spacefor Growth, lack of Resources changes into Unfavourable circumstances, the Tree will haveto Restructure itself. Under such Unfavourable Circumstances, the tree has to wither awayits leaves, drop off its twigs, break off its Branches, conserve its Roots, increase thethickness of the Bark covering its Trunk and Preserve its Trunk. When the Circumstancesbecome Favourable it will start developing new Nodes, develop nodes into twigs, developthe new twigs into branches, develop twigs in the existing Branches, develop new leafs,nourish and orient its Roots and continue to Grow. Restructuring can be considered as apart of a Cyclic Process. The Best Example for this can be thought of is Deciduous Trees.Likewise in case of IT Industry when situations like Diminished Capital, lack of Investments,Lack of Skilled Resources, Lack of Appropriate Technology or Phased-Out Technology, Lackof Opportunities, Lack of Revenue, Natural Calamity, Disaster may cause UnfavourableCircumstances and the Industry will have to undergo Restructure. During the Restructurethe Ratio of Resources like Management Staff, Skilled Resources, Production/ Service Staff,Marketing Staff, Administration and Support Staffs need to be determined first. Next theImportant Resources needs to be filtered out and the Ratio needs to be worked out againalong with the Restructuring of the Salary, the need and necessity to maintain minimumResources. All of this depend on the Strength of the Capital; Cash in Hand, Residual Cash,Investments, Stocks, Quality of Products/ Services, Technology, Infrastructure,Opportunities, Market Potential, Scope to Market, Revenue for Growth, Forecasts for Profit,Loss and Growth. After this the Unfit Resources will have to be withered away and Filteredout Resources needs to be Trained and Sharpened so that they can work better when theCircumstances Improve. When the Circumstances are going to be Worst, decision will haveto be taken on how to maintain the required Bare Minimum Resources, Curb New Hires,Conduct Retrenchment and identify the needs and necessities to be implemented so thatSeed of Re-Growth can be preserved and Growth can be initiated once the Favourablecircumstances occur. Growth Strategy & Direction By Page 13 of 14 Vinay Srinivasan
  14. 14. 5.9. ExpansionExpansion is the process of occupying and growing in other areas of the Growth withincreasing the Strength, having more than one Alignment and initiating new Growth. Forexample in case of a Tree the Expansion takes place when it grows Stronger in terms of itsTrunk Strength, Deep Rooted Roots, More wider across horizontal and taller with manyBranches, Twigs and Leaves. Here we have considered the Shape as a crucial factor forExpansion. The other crucial factor for Expansion is to start new Growth of its own varietyand kind in other areas by dispersing or spreading its seeds. Likewise in the case of an ITIndustry the Expansion can take place when the Growth increases for a wider HorizontalAlignment and for various Vertical Alignments. Also the Growth increases when newIndustries are started and Unlike Trees there are other possibilities of Expansion in Growthin the form of New Acquisitions or Mergers or through the means of Partnership.ConclusionA Good Growth Strategy will only be successful when it is executed in Right Time, by RightSkilled People. Further Extensive Planning is required to chart down the Strategy andSchedule the Tasks and Activities, so as to reach out the Target and Achieve the Goal. Otherthan this Adequate Strength, Right Favourable Opportunities will be necessary to implementthe Appropriate Growth Strategy and Realise the Revenue.References:1. Wikipedia Growth Strategy & Direction By Page 14 of 14 Vinay Srinivasan
  15. 15. About the Author:Vinay Srinivasan has very wide Experience in IT Industry. He holds Graduate Degree inElectrical and Electronics Engineering, Post Graduate Degree in Computer Applications andPost Graduate Diploma in IT Management. He is currently working as TechLead inTechMahindra, Pune. Growth Strategy & Direction By Page 15 of 14 Vinay Srinivasan