GROWTH STRATEGIES

and Crisis In Business

Growth

 Presented by:
Sahana
Archana
Gitanjali
Prithwiraj
 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.
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.
 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.
  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
 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?
 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
 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.
Overall Growth Strategies
Summarization Market Penetration
Market Development
Product Development
Expansion
of existing
Businesses Vertical
Integration -
Alternatives Forward & Backward
for Growth

Related
Diversification
into new
Businesses
Unrelated
Crisis of Business Growth
Business Growth
Financing Growth
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.
External Growth

Difference in work ethics and culture may result

takeovers, mergers and buyouts not to work
correctly resulting in a crisis.
Managing Growth
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)
Thank You