Strategies For Growth

Course Overview

Businesses intending to move from A to B must put

together a growth strategy that will enable it achieve it.

Growth strategies are set of plan, a kind of ladder, where

lower-level rungs present less risk but maybe less quick-

growth impact.

Course Objectives

i. Introduce Participants on how to develop strategies

for growth through innovation

ii. Introduce Participants on how to develop

strategies for growth through strategic alliances

such as joint ventures, collaborations, outsourcing

and franchising.

Course Outline

i. Intensive growth strategies

ii. Integrative growth strategies

iii.Strategic Alliances:

Intensive Growth Strategies

Market Segmentation

This concept is used to describe the a sub-set of a

market that is made up of people or organizations

with one or more characteristics that cause them

to demand similar goods/services based on

certain defined criteria unique to that segment.

Market Segment MUST meet the following criteria:

Distinct from other segments

Homogeneity of needs within the segment

Respond to the same market stimuli

Reached by market intervention

Market Segmentation contd...

These criteria are based on the following but not limited to:

Gender Price Interests Location Income... etc.

Market Segmentation contd...

Entry A Market Segment

Effective Marketing Pricing and Positioning Alternative Channels Product Development Financial Operational

NB: Entering a segment will necessitate the business owner to Conceptualizing the Whole Marketing Process…

Customers Company Competitors Collaborators Context

Marketing Analysis (The 5 C’s)

Marketing

Segmentation

Target

Market

Selection

Product and

Service

Positioning

Customer Acquisition Customer Retention

Profits

Creating

Value

Capturing

Value

Sustaining

Value

Product & Service

Pricing

Promotion Place/Channels

Marketing Mix (The 4 P’s)

Entry A Market Segment contd...

Integrative Growth Strategies

It is a strategy that describes how businesses use numerous markets to bring a type of product to the consumer. This occurs when a firm is being taken over by, or merged with, another firm which is in the same industry and in the same stage of production as the merged firm, e.g. a car manufacturer merging with another car manufacturer.

Horizontal Integration:

Economic of scale: this refers to the cost advantages that a business obtains due to expansion and its impact is observed in the reduction of the unit cost of the product.

Economics of scope: this concept refers primarily to reductions in average cost (cost per unit); that is, average cost/product is low as more of the same product is produced (printing)

Benefits of horizontal integration

Integrative Growth Strategies contd...

It describes companies in a supply chain owned and controlled by an individual whereby each company in the supply chain produces different product/services specific and made to satisfy a target market group. This concept was introduced and used by Andrew Carnegie and other businesspeople use the system to promote better financial growth and efficiency in their businesses.

Integrative Growth Strategies contd...

Vertical Integration

It seeks to increase profitability through greater sales

volume obtained from new products and new

markets.

Integrative Growth Strategies contd...

Diversification

Product Present New

Ma

rke

t Present Maket

Penetration Product

Development

New Market

Development Diversification

Diversification is part of the four main growth strategies defined by the Product/Market Ansoff matrix:

Integrative Growth Strategies contd...

Strategic Alliances

This defines the relationship between two or more parties to pursue a set of agreed upon goals or to meet a critical business need while remaining independent business. Partners or businesses that have agreed to engage in strategic alliance may furnish the new business or alliance with resources such as products, distribution channels, intellectual property, manufacturing, etc.

Types of Strategic Alliances:

Collaborations

Franchising

Outsourcing

Strategic Alliances

Some reasons for Strategic Alliances:

Strategic Alliances contd...

Strategic Alliance

Market Size

Technological Transfer

Shared Risks

Economic Specialization

You

Competitor

Customers

Supplier

Who you can form Strategic Alliances with:

Strategic Alliances contd...

WHOWINS?