IBUP018 ACHIEVING BUSINESS GROWTH
PART A
Critical Evaluation-Growth Strategy
Introduction
Growth strategy helps businesses to achieve their goals such as expansion of business. The plan of growth strategy helps companies face their current and upcoming challenges. Growth strategy helps companies in transforming their strategies in a way that helps them focus on their goals and targets that help them scale up their business globally and nationally (Rodrik, 2005). Businesses are dependent on their financial situation for growth and expansion. Growth strategies include market expansion theory, diversification, expansion of the product and acquisition. These factors help a business grow. It assists companies to stay ahead from their competitors in the market. Growth strategies help organisations in developing their financial state by methods that is helped to improve resources of an organisation (Rodrik, 2005). Future analysis and goals of a company can be successfully done with the help of growth strategy and it also assists employees to be focused which helps the organisation grow exponentially.
It also helps organisations grow and achieve growth in the market share they are currently holding (Burgelman and Doz, 2001). This can be achieved by development of new segments in the market, reach to more people for the sales of products and make it usage friendly for your customers so that retention can be done. Expansion of user base is also one of the ways that businesses can grow their market shares.
Businesses should invest in customer retention methods, open up in new locations internationally and nationally and expansion of the product line. This will benefit the organisation and support them in their growth.
Types of Growth Strategies
There are many types of growth strategies that are used by organisations for their benefit which are discussed below.
New Product development strategies– Product development is launching of new products in the market that are in demand (Prajapati, 2019). Apple is the biggest example of product development as it launches new products every year which attracts many consumers towards their innovation and technology. In 2021, they launched a new product, Air tag which helps in finding products like accessories, keys etc via Bluetooth tracking (www.macrumors.com, 2021). This is a new product in the market which is attractive for consumers.
Strategic collaborations and partnerships– Businesses should partnership with organisations that target the same market with a different product and relevant to their businesses as it helps grow market share by collaboration with a complementary organisation (Prajapati, 2019). This type of partnership is said to be strategic partnership. For Example, Nokia a smartphone company partnership with Microsoft which is a technology company so that they could create and build Windows phone with their expertise (www.geekwire.com, 2019). Such collaborations help the company grow exponentially as complementary businesses complement each other and target the same market having same goals. This helps the organisations to support one another in achieving their goal and helps in long term growth.
Growth Strategy Theory Advantages
Organisational growth strategies tend to have a significant impact on the functioning of business entities. It can be determined that there are many advantages of a comprehensive growth strategy which are discussed in-depth in the section below:
Increased Profitability
As the term suggests, growth strategies have a significant impact on the functioning of business organisations. It can be determined that the measures utilized towards the growth strategies tend to have a significant impact on the functional performance of the selected organisation. Growth strategies often involve the improvement in the performance of the business and ensuring the adaptation of measures that tend to streamline key operations (Kumar, 2020). Taking into account the case of Puma, it can be determined the company’s growth over the last few decades has enabled it to increase profitability. It can be determined that it ensures that the profitability increased as a result of improved revenue generation capabilities (Lupi, 2020).
Product Development
Growth strategies involve the enhancement in the product portfolio which ensures developing new products/services in order to cater to the changing demand for the customers. Multi-national corporations often have to indulge in regular product development in order to cater to the changing requirements of the customers in different operational regions (Majumdar, 2018). The case of Puma depicts how the company prioritizes its product development capabilities based on its growth strategies to maintain relevant in the market and enhance its competitive advantage over rivalling organisations on a regular basis (Lupi, 2020).
Expansion of Market
Growth strategies involve the development of an improved market base. It can be evaluated that in ensures that the companies operating in a particular sector is able to enhance its market presence by reaching out to a larger number of customers. In order to do, the company conducts necessary marketing activities and explores new market to improve the probability of its growth. It can be determined that the expansion strategy enables the organisations to explore its potential across global markets (Korhonen, 2016). The case of Puma highlights how the business has been able to explore the market through its extensive internationalization operations which allows it to explore its marketing potential (Lupi, 2020).
Growth Strategy Theory Disadvantages
Growth strategies are an inevitable aspect of the modern business framework as organisations continue to expand their presence in order to maximize profitability through strategic measures and implementation. However, there are disadvantages/drawbacks to growth strategies that must be mitigated to benefit from its key advantages as discussed.
Operational Complexities
Growth strategies involve making adequate changes to the operational methods to ensure that the company is able to enhance its value proposition. In order to make these changes, it is necessary to ensure the method through which the company conducts its day-to-day operations are changed to an extent or drastically. This may cause operational complexities that may impact the functional performance of the business entity in the short-term (Park, 2020). Towards avoiding operational complexities, it is necessary to focus on the development of key policies and transitional methods through which the management of the organisation going through the growth strategy can minimize negative effects of the growth strategy implementation process.
Investment Issues
Growth strategies clearly involve investment implications, it can be determined that the extent of investments through which organisations have to go through are often extensively high. This highlights that there is an element of financial risk involved in the implementation of growth strategies. In that context, it can be determined that it is critically important for businesses to prioritize measures that enable the organisation to go through transitions within the growth strategy through a stage-by-stage process to avoid the risks of large-scale financial losses as the investment related to growth strategies may have a significant implication on the functioning of the particular business organisation (Korhonen, 2016).
Inapplicability in Certain Regions
Countries that offer restrictive business environments are not suitable to apply growth strategies. A country such as China has a highly regulated business environment which is controlled by the government. Growth strategies involving measures that are not in synchronization to the governmental policies cannot be implemented. This depicts that the growth strategies of the organisations in this region must be strategized based on the restrictions to ensure that free trade without any issues related to regulatory factors (Musawir et al., 2017). Compliance to the laws, regulations and policies in such trade environments is considered to be of prime importance as it enables businesses to operate based on the restrictive trade environment.
PART B
Reflection
(1)
My dream is to become a successful entrepreneur in the future and build a massive business. I have this dream since I was a kid and the module has helped me learn many things that are important in business. Team work is an important component in building a business as employees and other team members are the biggest asset of a business. It is not easy to build a massive business. Hard work and persistence are the key to success. Building strategies and having a goal in mind are also important for the business to succeed as it gives motivation to employees and business owners. Having support from the team is an important aspect which helps in growth and cooperation is the key to working in a team as every individual has a different perspective to growth. We should support our team members even if there is contradiction in views. The project helped me in understanding the importance of growth strategies and how can it help a business stay ahead from its competitors. I have learnt how growth strategies can be used in favour of businesses to grow and what to avoid in the procedure to stay away from the negative part of growth strategy. Implementation of strategy is extremely important and following it religiously as it will help the business actually grow after that. The group project helped me understand how Puma SE used appropriate growth strategy like market penetration in order to retail its products in a huge quantity to grow its business even more. The growth strategy that they used was Ansoff Matrix which helped their business grow in the industry. The group project has made me realise how important it is to have the knowledge of various theories that help in analysing the growth strategies which is used by organisations. My interest in the topic helped me understand the group project easily and has made me gain immense knowledge by reading articles, modules and lecture notes given by the University. The module and group project has made me realise my capabilities that include leadership and management abilities. I can talk to people in a convincing manner which is important for the growth of a business. My management abilities can help me when I open my own business in the future as managing employees and clients is a huge asset to an organisation. My leadership skills will also help me in taking the right decisions for my business with respect to growth strategies and other important decisions.
(2)
Team work is an important aspect to become successful. I am extremely thankful for getting the experience of a group project as it has made me realise how important it is to cooperate with my team members even after having different views about the same thing. I was the motivator in the group and I helped my team in effectively working even though there were times when we did not feel like working on the project and were demotivated due to conflicts and arguments in the group. My team members were extremely cooperative in nature and I loved working with them as I learnt a lot from their style of working also. Practically working with a team has made me realise my leadership skills and motivational skills. These skills will enable me to become successful entrepreneur and I need to work on my short-tempered behaviour as that will not help me in achieving my goals. The group project has motivated me to work even harder on my shortcomings as it has made me realise that now is the time to work towards future goals. I would love to do group projects in the future after my experience with my team members as before I was scared of group projects but now it has made me realise why they are important for the success of an organisation. My team members helped me become much more productive than my usual capacity. We also had competition between each other which helped us to work more productively and faster than usual. Team members help each other by covering each other’s shortcomings. I am not good at handling my anger but my team members helped me stay calm in tough situations. In the future, I aspire to do group projects after staying calm and support my other team members as we are dependent on each other which makes it important for all of us to give our 100% in the project. There are many organisations that have group projects. The lessons I learnt from doing a group project will help me in the future if I am working in an organisation or if I am entrepreneur.
Reference
Burgelman, R.A. and Doz, Y.L., 2001. The power of strategic integration. MIT Sloan Management Review, 42(3).
Korhonen, S. (2016). A capability-based view of organisational renewal : Combining opportunity- and advantage-seeking growth in large, established European and North American wood-industry companies. helda.helsinki.fi. [online] Available at: https://helda.helsinki.fi/handle/10138/20635 [Accessed 28 Apr. 2021].
Kumar, D. (2020). Employee Retention – A Strategic Tool for Organisational Growth and Sustaining Competitiveness – ProQuest. [online] search.proquest.com. Available at: https://search.proquest.com/openview/b45f130ba24ab1f208f8b032bc379c0c/1?pq-origsite=gscholar&cbl=2030931.
Lupi, L. (2020). Key success factors of global brand repositioning strategies in the fashion industry: the case of Puma and Gucci. [online] tesi.luiss.it. Available at: http://tesi.luiss.it/27894/.
Majumdar, S. (2018). Modelling Growth Strategy in Small Entrepreneurial Business Organisations. The Journal of Entrepreneurship, 17(2), pp.157–168.
Musawir, A. ul, Serra, C.E.M., Zwikael, O. and Ali, I. (2017). Project governance, benefit management, and project success: Towards a framework for supporting organizational strategy implementation. International Journal of Project Management, 35(8), pp.1658–1672.
Park, S. (2020). Annotated normal CT data of the abdomen for deep learning: Challenges and strategies for implementation. Diagnostic and Interventional Imaging, [online] 101(1), pp.35–44. Available at: https://www.sciencedirect.com/science/article/pii/S2211568419301391 [Accessed 28 Apr. 2021].
Prajapati, A. (2019). Types of Growth Strategies: Top 10 Growth Strategies. [online] Economics Discussion. Available at: https://www.economicsdiscussion.net/strategic-management/types-of-growth-strategies/31914.
Rodrik, D., 2005. Growth strategies. Handbook of economic growth, 1, pp.967-1014.
www.geekwire.com (2019). Microsoft and Nokia reunite for new alliance, 5 years after failed $7B smartphone megadeal. [online] GeekWire. Available at: https://www.geekwire.com/2019/microsoft-nokia-reunite-new-alliance-5-years-failed-7b-smartphone-megadeal/.
www.macrumors.com (2021). AirTags: Everything We Know So Far. [online] Macrumors.com. Available at: https://www.macrumors.com/guide/airtags/.
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