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INTEGRATIVE GROWTH

STRATEGY

Submitted By:

PRIYA TALWAR
SHALINI SINGH
MANISHA GAUTAM
TAJINDER KAUR
SOURABH HARJAI
SHIVAM
LAXMIKANT SHARMA
IMRAN KHAN

Learning Objectives

Explore strategic innovation as a growth


strategy.
Discuss intensive growth strategies
growing within the current market.
Explain integrative growth strategies
growing within the industry.
Examine diversification growth strategies
growing outside the industry.
Consider growing by going global.

To Grow or Not to Grow

Factors affecting growth decision:

Demand for product/service


Size of the market
Leadership success

Startup
Early
Stages
of
Growth

High Growth
Stable
Growth
and
Growth
Company Focus

Capital
Customer
Distributio
n

Cash
Flow
Marketin
g

Resources
Innovation

Capital
Maintainin
Managemen g Success
t

Factors That Affect


Growth

Market factors:

Size and Characteristics


Competition
Intellectual-property rights
Predictability

Management factors:

Ability to adapt and change the business over


time even if the business is successful
Re-evaluation of key metrics

Problematic leadership tendencies:

Loyalty to the original founding team


Task orientationFocus
Single-mindedness of visionDiscipline
Working in isolation

Scaling factors:

Inability to understand and respond to the


business environment

A Framework for
Growth

Framework for growth

Scan and assess the environment


Plan the growth strategy
Hire for growth
Create a growth culture
Build a strategy advisory board

Growth Strategies

Strategic Innovation strategies: change the


game in an industry or market
Intensive growth strategies: exploit
opportunity in the current market
Integrative growth strategies: exploit growth
within the industry as a whole
Diversification strategies: exploit opportunities
outside the current market/industry
Global strategies: exploit opportunities in the
international arena

STRATEGIC INNOVATION

New concepts are not generally


attractive to established companies in
the early stages because:

They break the mold.


The early markets are generally small with
low margins.
Large companies typically wait to see how
the new model fares in the market and then
they either change their model or attempt
to acquire the entrepreneurs company.

Growing within the


Current Market

Market penetration

Increase sales through effective


marketing strategies within the
current target market

Gradually expand
Promoting additional uses for products
Attract customers from competitors by
advertising advantage over competitor
Go after noncustomers

Market development

Take product or service to a broader


geographic area
Franchising

Dealerships
Service franchises
Product franchises

Market development (contd)

Licensing- steps for a successful


transaction:

Decide exactly what will be licensed


Understand/define the benefits the buyer will
receive from the transaction
Conduct thorough market research
Conduct due diligence on potential licensees
Determine the value of the license agreement
Create a license agreement

Product development

Develop new products/services for


existing customers or offer new
versions of existing products
Breakthrough products may come
through unplanned means (i.e.
brainstorming, problem-solving, etc.)

Growing Within the


Industry

Vertical integration strategies

Horizontal integration strategies

Growing forward/backward within the


distribution channel
Buying up competitors or starting a
competing business

Modular or network strategies

Focus on core competencies and outsource


the rest

Diversification Growth
Strategies

Investing in or acquiring products/businesses


which are outside the core competencies and
industries
Use when all other growth strategies within the
current market/industry have been exhausted

Synergistic strategy
Acquire products/services unrelated to the companys
core products/services
Conglomerate diversification-acquiring businesses that
are unrelated to the companys current business

Growing by Going
Global

Born global a company that


generates at least 25% of its sales
in the first three years from
international marketplace and
derives competitive advantage
from outsourcing and selling in
several countries

Characteristics of successful globalization:

A global vision from the start


Internationally experienced managers
Strong international business networks
Preemptive technology
A unique intangible asset
Closely linked product/service extensions
A closely coordinated organization on a worldwide basis

Finding the Best Global


Market

Information sources:

International Trade Statistics


yearbook of the United States
International Trade Administration
offices in Washington, D.C. and at
district levels
Department of Commerce

The iPad Mini was launched last month,


although it is still called iPad and just
looks like a smaller version of iPad, it is a
totally new Apple product and indicating
that Apple is entering small tablet market.
Apple is pursuing a diversification growth
strategy through the creation of iPad mini.
Because it shares the same distribution
resources, use the same information
system and provide same application
downloads, this is a related diversification
opportunity.

Its strategy is based on the fact of the shrinking


PC market and the growing tablet market, and is
led by the ongoing bring-your-own-device
(BYOD) trend.
Tim Cook also described Chinese market as an
extremely exciting one, which currently makes
up 26% of Apples revenue.
It gains great popularity and good word of mouth
through its premium pricing, excellent design
and innovative culture. In China, Apple is now
definitely a premium brand that labels good
quality and good taste.

Export Financing

Sources:

Bank financing
Internal cash flow
Venture capital or private investor
capital
Prepayment, down payment, or
progress payment from foreign client

Assurances:

The Import-Export Bank

Foreign agents, distributors, and


trading companies
Choosing an intermediary

Due diligence work to assure the right


partner

Choosing a freight forwarder

Handles all aspects of delivering the


product

New Venture Action


Plan

Identify market, management, and scale


factors that may affect the growth of the
business.
Determine which growth strategy is most
appropriate for the business.
Indentify potential international markets for
the product or service.
Develop a plan for globalization of the
company at some point in the future.

THANK YOU

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