Growth strategy

1. GROWTH STRATEGIES and Crisis
In Business Growth
 Presentedby:
Sahana
Archana
Gitanjali
Prithwiraj

2.  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.

3. 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.

4.  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.

5.  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

6.  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?

7.  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

8.  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.

9. Overall Growth Strategies
Summarization
Alternatives
for Growth
Expansion
of existing
Businesses
Diversification
into new
Businesses
Market Penetration
Market Development
Product Development
Vertical
Integration -
Forward & Backward
Related
Unrelated

10. Crisis of Business Growth
Business Growth

11. Financing Growth

12. Financing Growth
Crisis
 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.

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

14. Managing Growth

15. 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)

16. Thank You