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Chapter

14

Strategies For Growth And Managing The Implications Of Growth

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Growth Strategies
Penetration Product Development

Existing

Market
New

Market Diversification Development

Existing New

Product

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Strategies
PenetrationPenetration- Growth By Selling More Of Existing Product To Existing Customers Market Development
New Geographic Market New Demographic Market New Product Use

Product Development- Sell New Products DevelopmentTo Existing Customers DiversificationDiversification- Sell New Product To New Market

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Product Integration
Backward Integration

Raw Materials Producer Raw Materials Wholesaler

Horizontal Integration

Manufacturer Finished Goods Wholesaler Retailer Customer

Horizontal Integration

Forward Integration
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Pressures On Firm Growth

1. Existing Financial Resources 2. Human Resources 3. Management Of Employees 4. Entrepreneurs Time
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Overcoming Financial Resources Pressure

Manage Cash Flow- Budget vs. FlowActual Manage Inventory Manage Fixed Assets Manage Costs/Profits- Compare Costs/ProfitsActual vs. Standard Percentages Taxes Record Keeping
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Inventory Valuation
FIFO- First Items In Inventory = First FIFOSold LIFO- Last Items In Inventory = First LIFOSold Convert To LIFO When:
Anticipate Increased Labor, Materials, Production Costs Business/Inventory Growing Computer-Assisted Inventory Control ComputerBusiness Is Profitable
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Overcoming Human Resources Pressures

Prepare Job Descriptions Itemize Specifications Outsource HR Responsibilities
Recruiting Hiring Establish Benefit Programs Payroll Firing Permanent vs. Part-Time PartCorporate Culture
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Overcoming Employee Management Pressure

Participative Management Establish Team Spirit CommunicateCommunicate- Open & Frequent Provide Feedback Delegate Continuous Training
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Overcoming Entrepreneurs Time Management Pressure

Increase Productivity Increase Job Satisfaction Improve Interpersonal Relationships Reduce Time Anxiety/Tension Better Health
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Time Management Principles

1. Desire- Willpower To Optimize Time Desire2. Effectiveness- Focus On Important EffectivenessIssues 3. Analysis- Determine Where Time Is AnalysisBeing Wasted 4. Teamwork- Small Amount Of Time Can TeamworkBe Controlled 5. Prioritize- Deal With Most Important PrioritizeTasks First 6. Reanalysis- Review Process, Delegate Reanalysis14-12

Growth Categories
Unused Potential Actual Growth

High

Professional Management
Low

Little Potential
No

Constrained

Growth Yes Aspirations

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