GROWTH AND RETRENCHMENT Flashcards
What are strategic methods
Strategic methods: The specific actions that will be taken in order to implement the organisation’s strategy.
When does growth occur
Growth occurs when there is an increase in the size of an organisation’s operations.
What could growth be
Physical assets (i.e purchasing new premises)
Number of employees
Increase product range
Mergers and acquisitions
International expansion
What are reasons for growth
Take advantage of brand image/ USP
Increase sales revenue/ increase market share
Enter into new markets - to spread risk
Gain economies of scale and reduce costs
Compete with rivals
Attractiveness of new markets
When does retrenchment occur
Retrenchment occurs when there is a reduction in the size of an organisation’s operations.
What are reasons for retrenchment Focus on core competences - reduce losses or sell off less profitable parts for the business
Leave high risk/ unprofitable markets
Reduce diseconomies of scale and reduce costs
Increase efficiency
