WK 9: 5 Stages of Growth Flashcards
1
Q
What are the 5 stages of business growth?
A
1) Existence
2) Survival
3) Success
4) Take-off
5) Resource maturity
2
Q
Problems and structure of Existence phase?
A
Problems:
- Obtaining customers, delivering products, providing services well enough to become a viable business.
- Expanding from pilot production.
- Sufficient cash to cover the start up phase.
Structure:
- Owner does most of work.
- Systems and planning non-existent.
3
Q
Problems and structure of Survival stage?
A
Problems:
- Short run, cash to breakeven and cover cost of replacing capital.
- Sufficient cash flow to finance growth of business
Structure:
- Still relatively simple. Some employees and managers.
- Systems development and planning minimal.
4
Q
Major decision and 2 variations of Success stage?
A
Major decision: keep company stable, or continue to expanding/other goals?
Success-Disengagement stage:
- Good economic health, sufficient size and production attained.
- Managers + professional staff team coming on board.
- Owner and decisions beginning to separate.
Success-Growth stage:
- Owner uses financial resources of company and targets it at growth.
- Hiring employees to remain profitable as well as target growth.
- High amounts of strategic planning.
5
Q
Problems and Structure of Take-off stage?
A
Problems:
- Growing rapidly + financing this growth.
- Delegation is important to facilitate this growth.
Structure:
- Decentralised and divisionalised.
- Refined and extensive operational and strategic planning.
6
Q
Problems and Structure of Resource Maturity stage?
A
Problems:
- Control financial gains
- Retain advantages of size.
Structure:
- Large amount of staff and resources;
- Strategic and operational planning in place.
- Owner and business are separate, financially and operationally.
7
Q
What is stage 6: ossification
A
Lack of innovation + avoidance of risks.
8
Q
What are the 2 key management factors?
A
Company and Owner
9
Q
4 KMF for Company
A
- Financial resources
- Personnel
- Systems
- Relations
10
Q
4 KMF for Owner
A
- Goals
- Operational abilities
- Managerial abilities
- Strategic abilities
