1.1 Introduction
Growth strategy is the organisation formulating their plan to accomplish their objectives and goals to grow in revenue and size of the business. However according to (Bridge, O’Neill and Cromie 2003), she defines growth strategy as a “...the movement of the business into bigger premises, taking on more staff, significant increases of turnover, taking on a new product line or lines, buying another business, and so on” Growth Strategies are important for businesses as they allow the business to move in a formal direction. Businesses can easily be affected by the smallest of changes for example new customers or the arrival of new competitors which could have a negative impact, so planning is very important and takes care of additional effort and resource for faster growth. With these growth strategies, organisations try to achieve numerous things for example, obtaining economies of scale, attaining market leadership and retaining talented staff.
2.1 Organic/Inorganic Growth
There are 2 ways that a firm grows, which are organic and inorganic growth. Organic growth is internal growth which means to expand your business and increase your turnover without acquisitions or moving to new markets. This type of growth is more planned, slower and more natural hence the term “organic”. It involves very little change to the organisations structure and can be easily managed. Advantages of organic growth is that it is much safer than rapid growth or growth using external resources through acquisitions and mergers. Not as much capital is needed so there is less risk on your finances. Disadvantages on this type of growth is that it is much slower and that it is very limiting as there is only a certain point that an organisation can ...
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a. Basically, corporation strategy demonstrates a corporation’s overall direction in the light of its general mindset toward growth and the management of its businesses and product portfolios. There are three crucial categories, which are stability, growth, and retrenchment, that involve within corporation strategy. Additionally, business strategy often occurs at the business unit or product level, and it highlights the improvement of the competitive position of a company’s products and service in the particular market segment served by the business unit. Competitive and cooperative strategies are two main categories that match within business strategy. Furthermore, functional strategy is the method that through a functional area to
Gaughan, P. A., 2002. Mergers, Acquisitions, and Corporate restructuring. 3rd ed.New York: John Wiley & Sons, Inc.
What is the added value of planning for a fast-growing company in an uncertain and dynamic environment?
The purpose of this paper is to attempt to recompile information about the merger of two corporations; one of many taking places i...
Marks and Spenser alternative for the substantive growth can take the following strategies, horizontal integration, related diversification, vertical integration and unrelated diversification.
A company must identify its strengths and weaknesses in order to develop growth. Downsizing products is more important than developing new products. A company must be able to identify where there weak markets are at. Times change and so do products. The products that are less profitable or simply aged are the ones that must be downsized in order to make way for a different, more innovative market. When developing growth strategies a company must use the product/market expansion grid. First the company has to figure out whether they can have better market penetration, second they must consider looking for market possibilities for current products. Third they must develop their products into innovative products that people can’t live without having. Lastly they need to be diverse with their company, therefore expanding and including different features to the company could draw more attention from different
In inorganic growth, you will be able to acquire more assets and tackle new market place right away. At the same time, it could be overwhelming to handle more employees. You could be entering to marketplace where you don’t have experience with. This could lead to growth in different direction that you didn’t look forward to.
McDougall, Gilles. (1995). The Economic Impact of Mergers and Acquisitions on Corporations. Retrieved on July 9th, 2006 from http://strategis.ic.gc.ca/epic/internet/ineas-aes.nsf/vwapj/wp04e.pdf/$FILE/wp04e.pdf
Inorganic Growth on the other hand is the growth that results from mergers, acquisitions, joint ventures. This is an accelerated approach for achieving growth, where one company acquires, merges or forms a JV with another firm in order to have quick access into new markets, new geographies and/or gaining synergies and enhancing the competitive advantage of the firm
The distinction between the start-up and growth stages in not easily defined. The distinction lies in the revenues, profits are stronger and are consistent with an increase in customers, as well as, new and exciting opportunities for the employees to pursue. Managers can look forward to many managerial challenges, perspective policy issues and re-evaluating the business plan for revisions. A manager’s focus should be in the running of the business, with a greater emphasis on accounting and human resource management systems. New staff will have to be hired, trained and prepared for the influx of business.
A growth strategy is a long term success plan and managing competitors. If the plan is without a vision and mission, it might not work in some cases. For a business to maintain a growth for a long term, we must first verify and validate on what is that one thing that sets us apart from our competitors. We must first understand the very basis oh why a customer decides
For years business has been sprouting up. A new entrepreneur arrives with an idea, and builds on that and eventually builds that something into a business. From the earliest stages a business must have some kind of plan. Whether this idea is conceived at a table on a piece of scratch paper or something more formal, the business most likely derived from a business plan.
Merger refers to a process where two companies agree to integrate their operations on a coequal (Equal Importance) basis. Due to the fact that they both have the resources and expertise that they together are able to form a strategic alliance that would gain an competitive advantage over their competitors. Secondly, Acquisition refers to the process where one company taker over another company with the intention of making it part of the growth strategy and core competence, making the acquired firm as a subsidiary within its portfolio of businesses.
A successful business strategy will identify changes in the external trends in the market place. Plan out what the company’s future direction is. Set out the goals for the management team. It will identify a vision of where the company wants to be in the future. Keep all employees informed of the direction of the company.
Mergers mean two or more companies combining together to form one business or firm. There are six different types of mergers: Horizontal, Vertical, Conglomerate, Market extension, Product Extension and Diversified activity.