growth strategy Flashcards
company growth stages
gestation
inception
pilot test
roll out
growth
expansion
maturity
growth risks
start-ups without a product
no systematic approach to business plan
‘entrepreneur knows best’
understanding the market
one product company
dynamics and dimensions of growth
see drawing in book
DIMENSIONS
financial growth
strategic growth
structural growth
organisational growth
internal growth strategies
new product development (NPD)
necessity in fast moving, competitive markets such as FMCG
other product related strategies
improve existing
increase market penetration of exisiting
extend product lines
geographical expansion
advantages and disadvantages of internal growth strategies
advantages
provides maximum control
preserves organisational culture
encourages internal entrepreneurship
disadvantages
slow form of growth
need to develop new resources
external growth strategies
mergers and acquisitions
merger happens when two firms, often of about the same size, agree to go forward as a single new company rather than remain separately owned and operated eg. merger between orange and tmobile to now create EE
acquisitions when one company takes over another and clearly establishes itself as the new owner eg. coca cola with innocent
licensing
granting of permission by one company to another company to use a specific form of its intellectual property under clearly defined conditions
strategic alliances
partnership between two or more firms developed to achieve a specific goal. usually informal and doesn’t involve the creation of a new entity. can boost rate of product innovation and foreign sales
joint ventures
entity created when two or more firms pool a portion of their resources to create a separate, jointly owned organisation
franchising
globalisation
types of licensing
technology licensing
licensing of a proprietary technology that the licensor typically controls by virtue of a patent
merchandise and character licensing
licensing of a recognised trademark or brand that the licensor typically controls through a registered trademark or copyright
types of joint venture
scale joint venture
similar
link joint venture
dissimilar
relationship between franchisor and franchisee
productive relationship of the below means wealth is built for both parties
works in areas low on innovation and highly standardised
franchisor
creates value-viable opportunity funded partly by franchisee. low cost start-up
franchisee
buys right to run franchise
types of franchise
business format
trade-name
product distribution
advantages and diadvantages of external growth strategies
advantages
reducing competition
access to the established brand name
economies of scale
diversification of business risk
disadvantages
clash of corporation cultures
increased business complexity
loss of organisational flexibility
advantages and disadvantages of strategic alliances and joint ventures
advantages
gain access to particular resource
economics of scale, risk and cost sharing
gain access to foreign market
disadvantages
management complexities
financial and organisational risk
risk becomes dependent on a partner
percentage with international sales within 3 years of founding
25%
factors driving increase in international entrepreneurship
tariff barriers and other legal barriers to trade
changes in technology
increasing use of alliances
types of strategic alliances
technology
cooperation in development, technology, manufacturing, engineering
marketing
matching a company with a distribution system that markets its goods
eg. waitrose had an alliance with the internet grocery retailer ocado from 2000. they distribute waitrose goods bought online through their website. however from mid 2011, waitrose did their own deliveries…
