This is the 2nd part of the undergraduate course in Growth Strategies: External Environment, the Space for Growth. Read by Pavel Luksha

1. GROWTH STRATEGIES External Environment: Space for Growth Pavel Olegovich Luksha [email_address]

2. Defining the growth Growth is the idea of expansion Employees Units (e.g. offices, plants, shops, sq.m.) Organizational expansion Sales (revenue, units sold, no of items, no of countries etc.) Expansion into markets Metrics Idea

3. Why is growth important? globalization hypecompetition technological changes social changes GROWTH

4. Growth dynamics Revenue and growth rate: Wal-Mart between 1971 and 2002 Growth rate goes down as revenue goes higher Source : ( Ghemawat, 2004)

5. It is difficult to retain growth rate Source : ( Cao, Jiang, Koller, 2004) Growth rate reduced as companies ( S&P500) grow

6. Growth dynamics: why? low high low high revenue growth rate crisis management negative growth management recovery from no-growth hyper-growth

7. Growth dynamics: lifecycle growth management management of no-growth crisis management revenue time hyper - growth

9. Factors behind the strategy and growth MICRO-LEVEL FACTORS (ORGANIZATION) MESO-LEVEL FACTORS MACRO-LEVEL FACTORS politics econo- my technology culture demo- graphy clients suppliers investors job market competitors natural environment social movements

23. Industry growth and company growth Industries 1. Homeware 2. Food , tobacco 3. Automotive components 4. Pharmaceuticals 5. Insurance & financial services 6. Software and IT services 7. Medical equipment 8. Semiconductor manufacturing 9. Energy Source : ( Baghai, Smit, Viguerie, 2007)

27. Market creation : ‘blue oceans’ business competencies competitor propositions client needs & wants sweet spot Source : (Collis, Rukstad, 200 8 )

29. Blue Ocean strategy Source : ( Kim, Mauborgne, 200 4 ) Red Ocean strategy Blue Ocean strategy work in existing markets try to beat competitors use existing demand cost OR quality organizational structure complies with the cost leadership or differentiation strategy create new markets make competition non-relevant create and fulfill new demand cost + quality organizational structure complies with the strategy that combines cost leadership and differentiation

34. Beverage market: strategies for growth