| Definition |
Growth Strategies focus resources on discovering and implementing opportunities for profitable growth. They seek to capitalise on evidence suggesting that revenue-driven profit growth can achieve 25 to 100 percent greater share price appreciation than cost-driven profit growth. Growth Strategies assert that profitable growth is the result of more than good luck - it can be actively targeted and managed. Growth Strategies alter a companys goals and business processes to challenge conventional wisdom, identify emerging trends, and build or acquire profitable new businesses. They typically require increased Research & Development investments, greater emphasis on recruiting and retaining extraordinary employees, additional incentives for innovation, and greater tolerance of risk. |
| Implementation |
Growth Strategies search for expansion opportunities through:
- Internal ("organic") growth, including:
- - Greater share of the profit pool for existing products and services in existing markets and channels
- - New products and services
- - New markets and channels
- Alliances and acquisitions:
- - In existing products, services, markets, and channels
- - In adjacent businesses surrounding the core
- - In non-core business arenas
Successful implementation of Growth Strategies may use either formal or entrepreneurial methods to help managers:
- Communicate the importance of growth
- Strengthen the inflow and circulation of new ideas
- Effectively screen and nurture profitable ventures
- Create differentiating capabilities that will be valuable to the future marketplace
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| Purpose |
Managers employ growth strategies to improve both the strategic and financial performance of a business. By strengthening and expanding the companys market position, growth strategies improve both top-line and bottom-line results. Growth strategies may also be used to counteract (or avoid) the adverse effects of repeated downsizing and cost cutting programs. |
