This document discusses types of growth platforms and strategies for companies seeking new growth, including horizontal and vertical integration, as well as developing new products/services versus entirely new platforms. It provides examples of companies that created new growth platforms, such as a consumer goods manufacturer that established an independent unit. Challenges of new growth platforms include committing leadership, prioritizing strong teams over initial ideas, and systematically creating the platforms. Factors that can lead to failure include lack of delegation, waning commitment, overconfidence, and organizational decline marked by blame, avoidance, and passivity among executives.
3. GROWTH STRATEGIES
Horizontal Integration
◦ Occurs at the same level of business
◦ It is of two types: Internal expansion and External expansion
◦ Occurs through Mergers & Acquisitions
4. Vertical Integration
- The firm grows in Upstream or Downstream activities.
- Expansion of activities downstream is known as forward
integration, and expansion of activities upstream is known as backward
integration.
5.
6.
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8. A NEW PRODUCT OR SERVICE Vs
A NEW PLATFORM
COMMON COMPANY
Developing a particular product or service to beat the
competition
Acquiring a company to provide a product or service
complementary to the existing lines
HIGH-GROWTH COMPANY
Creating a whole new family of products or services
that meet customer need that the company has never
before addressed
New Platforms can start as Product or Service Idea
9. Originally: branded consumer goods manufacturer
Change agent: CEO A.G. Lafley.
NGP Unit: FutureWorks
◦ stand-alone BU to build growth platforms and search for opportunities
between and beyond of existing BU.
Challenge of Platform
1. Put credible chief growth officers in charge.
2. Believe that the team is more important than the idea.
3. Have NGP units that are independent and embedded.
4. Guarantee financial independence.
5. Systematize the NGP creation process.
11. THE PSYCHOLOGY OF
CORPORATE DECLINE
Some people began to do minimum, showing up at
work just to earn their end-of-year bonus.
As problems mounted, people tended to either
blame or avoid one another.
People’s time and energy were spent on self
protection instead of joint problem solving.
It became rare for all the senior executives to sit
down in one room together.
Finally, people become passive and helplessness.
Sign to turnaround