The Pros And Cons Of Corporate Growth Strategies

Growth strategies

By far the most widely pursued corporate strategies of business firms are those designed to achieve growth in sales, assets, profit, or some combination of these. There are two basic corporate growth strategies: concentration within one product line or industry and diversification into other product and industries. These can be achieved either internally by investing in new product development or externally through mergers acquisitions or strategic alliances.

A merger is a transaction involving or more corporations in which stock is exchanged, but from which only one corporation survives. Mergers usually occur between firms of somewhat similar size and are usually “friendly”. The resulting firm is likely to have a name derived from its composite firms.

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Selection of strategy:

After the pros and cons of the potential strategies alternatives have been identified any evaluate one must be selected from implementation. The most important criteria is the identity of the propose strategy to deal with the specific strategic factors developed earlier in SWOT analysis.

Corporate scenario

Corporate scenario are pro forma balance sheet and income statement that forecast the effects that each alternative strategy and its various programs will likely have on division and corporate return on investment. Corporate scenario is extension of industry scenario.

Development of policies:

The selection of the best strategic alternative is not the end of the strategy formulation. Management now must established policies that define the ground rule for implementation. Flowing from the selected strategy, policies provide the guidance for decision making an action throughout the organization.

Policies tend to be rather long lived and can even outlast the particular strategy that created them.( David Hunger & Thomas. L. Wheelen)

О Strategy implementation: Organizing for