The Importance Of Business Growth Strategies

2006 words - 8 pages

1.1 Introduction
Growth strategy is the organisation formulating their plan to accomplish their objectives and goals to grow in revenue and size of the business. However according to (Bridge, O’Neill and Cromie 2003), she defines growth strategy as a “...the movement of the business into bigger premises, taking on more staff, significant increases of turnover, taking on a new product line or lines, buying another business, and so on” Growth Strategies are important for businesses as they allow the business to move in a formal direction. Businesses can easily be affected by the smallest of changes for example new customers or the arrival of new competitors which could have a negative impact, so planning is very important and takes care of additional effort and resource for faster growth. With these growth strategies, organisations try to achieve numerous things for example, obtaining economies of scale, attaining market leadership and retaining talented staff.
2.1 Organic/Inorganic Growth
There are 2 ways that a firm grows, which are organic and inorganic growth. Organic growth is internal growth which means to expand your business and increase your turnover without acquisitions or moving to new markets. This type of growth is more planned, slower and more natural hence the term “organic”. It involves very little change to the organisations structure and can be easily managed. Advantages of organic growth is that it is much safer than rapid growth or growth using external resources through acquisitions and mergers. Not as much capital is needed so there is less risk on your finances. Disadvantages on this type of growth is that it is much slower and that it is very limiting as there is only a certain point that an organisation can grow in the given long time period.
2.2 Modernisation
Modernisation is a growth strategy that uses internal resources, so this strategy is organic growth. Modernisation is when the technology is upgraded within the business. This allows the business to increase the quality and size of production in addition to reducing the waste of production. This strategy enables stability within the business because of an increase in revenue. There are limitations to this for example, the business may not be able to finance this type of strategy and the employees may find it difficult to adapt; leading to confusion and spending time and money on staff.
2.3 Mergers
The second type of growth is inorganic growth or in other words external growth. This type of growth uses external resources therefore businesses can grow through 3 growth strategies, merging with other organisations, acquiring a company or networking. A merger occurs when 2 separate businesses join to form a new business. They share each other’s resources and focus on the best activities of each. The main reason for merging is to save costs on production and also generate capital to allow them to enter markets and promote new products which they won’t be able to do as 2...

Find Another Essay On The Importance of Business Growth Strategies

The Importance of Peers in Children: CFS-494-Parenting Strategies

529 words - 2 pages During the adolescent years peers are extremely important because they need their peer's guidance for everything. All adolescents want to be like their peers because it is the peers that set the style and all children want to look good in their peer's eyes.The number one importance is communication. There are many ways that parents can use to communicate with their children such as: playing psychological roles, always start the sentence with a

The Importance of Action Toward a Negative Population Growth

633 words - 3 pages life. The necessity for the American populace to actively pursue measures to slow, halt and eventually reverse population growth trends is quickly becoming and may already be the most urgent matter afflicting this country today. Nearly every complication, no matter how miniscule or hypercritical the concern may seem, can in some way be traced back to the initial issue of overpopulation. Endless traffic jams, nearly six dollar gallons of milk

Growth Strategies for Ophthalmic Consultants of Boston

1931 words - 8 pages Growth Strategies for Ophthalmic Consultants of Boston If we at Ophthalmic Consultants of Boston (OCB) intend to be a profitable business with plans of continued growth, then we must make some fundamental changes in the way we operate our business. First we need to get back to the very basics and write a business plan! The Information contained in a business plan will help us to determine who we are, where we want to go, and how we intend to

Case Study: Swatch And The Global Watch Industry International Business, Repositioning Strategies, Marketing, Management Issues, And Recommendations For Growth

1734 words - 7 pages IntroductionThe Swatch Group had many early on successes due to repositioning strategies and a boost from acquisitions. On the surface, the Swatch Group was the world's leading manufacturer of watches in the late 1990's. They had 14 percent of the world market share and it appeared that gross sales and net profits were on the rise; however, under the covers, it was a much different story. Swatch was facing a myriad of issues that needed to be

The Importance of Big Data to Business

900 words - 4 pages value chain. We can also note that nowadays, the IT service is now part of all departments. That was not the case several years before. It really shows the importance of Big Data and how it is important to know how to use it and to take advantage of it. Big Data in Business The way of the world is constantly evolving, technology gets better, faster and cheaper every day and this has created an opportunity for businesses with the right resources to

The Importance of Good Communication in Business

969 words - 4 pages This skill is one of the elementary functions of management in any business and its importance is hardly be overstated. It is a process of transmitting information, ideas, thoughts, opinions and plans between various parts of an organisation. It is impossible to have a relationship with stakeholders without communication. Good and effective communication is required not only for forming relations but also for success of the business. Business

The Importance of Ethics in Business

1471 words - 6 pages business relationships. These characteristics are the bases for our integrity. This in term identifies our character and is the basis and guidelines for how we are judged and viewed among our peers. I also believe that it is very important for an employer to hire people who possess a positive work ethics and are fanatics of integrity. This in term leads to them being fanatics of good customer service. A strong deterrent to unethical behavior

The Importance of Citations in Pet Business

982 words - 4 pages make your pet business articles and advertisements stand out as not only informative but also credible. Properly adding citations to all of your posts can increase the quality and value of your articles and advertisements immensely. Why is This so Vital to Pet Businesses? When it comes to many other topics, some people may be willing to use information that is not backed by sources because the topic being addressed isn't very important. This is

The Importance of Recognition in Business

635 words - 3 pages Today, employees' turnover and absences rates from work become a major problem in business society. Therefore, motivate an unmotivated employee is very important factor to keep the organization moving in the right direction. Some people may ask, "What is the best way to motivating and rewarding today's employees?" Employees can be motivating a lot of ways such as job itself and recognition. There are hundred of small things you can do to provide

International Business: The Importance of Ethics in Business

1718 words - 7 pages International Business The business world has always relied heavily on contractual agreements while conducting business. These contracts while written in ink, are set in stone. Once your business partner signs his/her name on the dotted line the pact has been sealed and nothing else needs to be said. But what happens when you take away the physical contractual element and everything is agreed upon through one's word? The world of

The importance of Hitler to the growth of the Nazi Party

1061 words - 4 pages Hitler was very important to the growth of Nazi power from 1919 to the start of WWII. Firstly, in a year, he gained power in the German workers party, which in a decade would become the only party in Germany. Early on in 1919, his talent for public speaking and the use of the local army's resources drew large audiences to events sponsored by an organization that only had 100 to 200 members. An example of this is when he presented the party's

Similar Essays

Explain The Importance Of Business Planning To The Survival And Growth

1657 words - 7 pages Explain the importance of business planning to the survival and growth of organisations. A business plan should always for a business start up, the use of the business plan should not stop there, and businesses should be planning constantly in order to run their business effectively and efficiently. Businesses have to think about how they are going to plan for survival or growth, therefore they need to do business planning, to help the

"Secular Stagnation: The Importance Of Economic Growth"!

851 words - 3 pages INTRODUCTION TO MACROECONOMICS Tom Assouline 1442477 Christian Krelling Monday, November 24, 2014 !! One thing falls, everything else falls apart "Secular stagnation: The importance of economic growth"!! Economic growth is the increase in the market value of the goods and services produced by an economy over time. It is measured as the percent rate of increase in real gross domestic product, or real GDP. Of more importance is the growth of the

The Importance Of E Business Essay

1046 words - 4 pages their products right off of the Web. There are millions of electronic businesses on the Web; some companies have been a huge success and some have been a huge failure. In order for an e-business to survive a company must understand the market in E-Business, the importance of E-Intelligence, understand the failure of other businesses, and develop an E-Readiness plan. Electronic commerce enables companies of all sizes and all market sectors to compete

The Importance Of Business Education Essay

840 words - 4 pages their employers and get promotions, raise and appreciation for their hard work. All of the above can happen only when one has principally strong fundamentals and deep understanding about the business one works for as an employee. One needs to remember the importance of education as it funnels the understanding and technicalities of a respective particular sector. Similarly, business education is an essential part of education which must be completed