Growth Strategies: External Environment

GROWTH STRATEGIES External Environment: Space for Growth Pavel Olegovich Luksha [email_address]

Defining the growth Growth is the idea of expansion Employees Units (e.g. offices, plants, shops, sq.m.) Organizational expansion Sales (revenue, units sold, no of items, no of countries etc.) Expansion into markets Metrics Idea

Why is growth important? globalization hypecompetition technological changes social changes GROWTH

Growth dynamics Revenue and growth rate: Wal-Mart between 1971 and 2002 Growth rate goes down as revenue goes higher Source : ( Ghemawat, 2004)

It is difficult to retain growth rate Source : ( Cao, Jiang, Koller, 2004) Growth rate reduced as companies ( S&P500) grow

Growth dynamics: why? low high low high revenue growth rate crisis management negative growth management recovery from no-growth hyper-growth

Growth dynamics: lifecycle growth management management of no-growth crisis management revenue time hyper - growth

Blockbuster Inc. ,[object Object],[object Object],[object Object],[object Object],Source : ( Warren 2008 )

Factors behind the strategy and growth MICRO-LEVEL FACTORS (ORGANIZATION) MESO-LEVEL FACTORS MACRO-LEVEL FACTORS politics econo- my technology culture demo- graphy clients suppliers investors job market competitors natural environment social movements

External environment: growing in markets ,[object Object],[object Object],[object Object]

Growth into related markets: Olam ,[object Object],[object Object],[object Object],[object Object],[object Object]

Growing from the core ,[object Object],[object Object],[object Object],[object Object],[object Object]

Identification of the core business ,[object Object],[object Object],[object Object],[object Object],[object Object]

Growth into related markets: Santa Bremor ,[object Object],[object Object],[object Object],[object Object],[object Object],сс

Growth into new sales chanels: Top Kniga ,[object Object],[object Object],[object Object],[object Object]

Six ways of growing from the core ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source : ( Zook , Allen 200 3 )

Growth to new niches to support the core market ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Growing from the core: value extension ,[object Object],[object Object],[object Object]

IT giants and green energy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What can be seen as value extension Value proposition Growth directions Cases low price lowcoster businesses combining comfort and low prices ,[object Object],[object Object],customer relations businesses competent in customer-tailored solutions ,[object Object],[object Object],techno-logical superiority innovation management competence , market creation in new technologies ,[object Object],[object Object],[object Object]

Brand extension ,[object Object],[object Object],[object Object],[object Object],Source : (Ahluwalia , 2008)

Growth driven by segment growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Source : Forbes, 2008; (*) Baghai, Smit, Viguerie, 2007

Industry growth and company growth Industries 1. Homeware 2. Food , tobacco 3. Automotive components 4. Pharmaceuticals 5. Insurance & financial services 6. Software and IT services 7. Medical equipment 8. Semiconductor manufacturing 9. Energy Source : ( Baghai, Smit, Viguerie, 2007)

Mobile content market ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Videogaming : a recession-proof sector? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

ABB: efficient equipment maintenance ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Market creation : ‘blue oceans’ business competencies competitor propositions client needs & wants sweet spot Source : (Collis, Rukstad, 200 8 )

Defining the difference Source : (Collis, Rukstad, 200 8 ) ,[object Object],[object Object]

Blue Ocean strategy Source : ( Kim, Mauborgne, 200 4 ) Red Ocean strategy Blue Ocean strategy work in existing markets try to beat competitors use existing demand cost OR quality organizational structure complies with the cost leadership or differentiation strategy create new markets make competition non-relevant create and fulfill new demand cost + quality organizational structure complies with the strategy that combines cost leadership and differentiation

Nintendo Wii ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Six ways of finding Blue Oceans ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Six ways of finding Blue Oceans (2) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Blue Ocean in Gaming: Facebook Games ,[object Object],[object Object],[object Object]

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