IBUP018 ACHIEVING BUSINESS GROWTH
Critical evaluation of practical relevance
Growth strategy theory
Growth strategy mainly refers to an organizational plan that’s helps then to growth in the competitive atmosphere in the market. Growth strategy can describe a plan that helps an organization to overcome from the challenges that they face during organisation functions (Baltina, Bolodurina, and Gorbatenko, 2018). Also, this strategy can be described as an organisational transformation strategy where a company can change its aim, goals as well as targets for enhancing their market in the global scale. Also the growth strategy can be defined as a plan where the market gets developed by new segmentation. On the other side, this study proved an explanation regarding extending the base of users. A growth strategy mainly focuses on enhancing the level of business and to make the company reach a higher level (Chen, Zhang, and Wei, 2020). The growth strategy is able to describe the methods that help in financial development and it is able to improve the resources of the company. The marketing opportunity gets enhanced as well as the strategy helps to deal with the government or federal rules and regulation along with a competitive environment. A growth strategy is essential for a company to build the future agenda for a sustainable employee base and company as well. By this Growth strategy theory their employees stay more focused and this provokes the organisation to think for betterment.
Advantage of Growth strategy theory
The key elements of this growth strategy helps in market penetration, diversification, and development of product and market expansion.
Market penetration
The growth strategy help to enhance the in the financial condition from the current situation. In order to get progress in the economical state, the growth strategy also focuses on the development of product and its quality in the market (Sayers, Penning-Rowsell, and Horritt, 2018). On the other side, the growth is advantageous for the companies because it attracts the customers by highlighting the goods and services that are better than the others that survive in the market. Also this growth strategy helps in development of the existing product that the company is selling to the customers. The growth strategy provokes the management to mainthe the prices so that the customers can effort it (Speldekamp, Knoben and Saka Helmhout, 2020). Also, at times the prices can get decreased and increased as per market situation as well as for distribution and promotion of goods.
Diversification
Diversification can be tricky and risky as times as this includes the marketing strategy of a company. Here the growth strategy can be useful in this factor as well (Trigeorgis and Reuer, 2017). Diversification refers to launching a new product and service that has already explored the competition in the market. Growth strategy has advantages from the aspect of horizontal diversification as this helps in the development of new goods and services in the organisation. It proves the company to make new products that are connected with the existing product in the market. Such as if a company sells notebooks they can eventually sell pen, pencils. From the perspective of vertical diversity, the growth strategy helps in the development of equivalent products or the other goods and services (Zollo, Minoja, and Coda, 2018). Such as if a company is providing construction services, they must sell paints and other housing materials for the construction.
Development of product
Development of the products helps us to introduce new products to the market (Zhang and Song, 2020). Here the growth strategy helps in launching the new products in the market where the similar products are already existing. On the other side. Here the growth strategy helps to maintain the customer base in the company who prefers to choose products from a particular company in spite of other similar products’ existence in the market. The growth strategy is effective as the products get developed after the market research. This helps to find out the demand of the customers (Chen, Zhang, Tong and Wei, 2020). Growth strategy is advantageous for the companies because it is useful for joint development where the other companies can become partners and make a new brand. On the other side, growth strategy helps in the development of additional processes as services that make a company unique.
Market expansion
Market expansion refers to enhancement of sales in the company when the market is already explored as discussed before (Hausmannet et al., 2019). On the other side, growth strategy helps in examining the existing offers in the market that other companies are offering to their customers. This growth strategy is advantageous for the company as it provokes thoughts out of the box. This strategy plays a major role in the expansion of the market on the international scale. It helps to lead the company in the global market where competition is even more intense. Rather than these factors, the customer base gets stronger in a new region when the company tries to explain with the help of growth strategy.
Disadvantage of Growth strategy theory
There is no doubt that Growth strategy helps to develop the company but there are multiple disadvantages as well.
Investment
The growth strategy helps to develop the company but it involves a lot of investment in the construction of the infrastructure of the company. There is a need for a lot of capital (Lin, Hsu, Hsu, and Chung, 2020). By examining the negative aspect of this growth strategy it has been found that there is a chance of unbalanced growth. On the other side, the economic growth man runs to a negative level due to implementation of this growth strategy. There is a need for lots of money for the promotion of business that the business can grow faster. This is a negative side of growth strategy because the company may face multiple issues regarding lack of money.
Complicated
As a disadvantage, growth strategy can be complicated as this cannot be applied in the new companies (Posey, 2020). This strategy can be applied to the experienced companies who have multiple experienced people in the company. On the other side the new companies can implement the growth strategy but there is need of experienced people. If their employees or the management is not familiar with the concept of growth strategy, there can be multiple industrial hemorrhage in the company. Apart from that the disadvantage can be a complex business model that is easy to understand. The growth strategy is able to give ideas regarding improving the business implication but a complicated model of business can waste a lot of time and effort.
Disadvantage of location
It has been found that lack of mobility can affect the business (Speldekamp, Knoben, and Saka Helmhout, 2020). Hence from the perspective of a location, the growth strategy cannot help a company to grow in an undeveloped place where technology is not improved. On the other side, lack of economic development of a country can lead to industrial damage. Hence as disadvantage, the growth strategy can provoke a company to extend in the market but lack of facilities can cause financial damage to the company.
Not applicable in democratic regions
There are many democratic countries like China and Russia who cannot apply this growth strategy in their business (Zollo, Minoja, and Coda, 2018). Unbalanced growth can be noticeable through this growth strategy. Here the social aspect such a slow standing of living is not able to support the growth of an organisation. Hence the domestic companies focus on the foreign countries rather than their own region. Hence the growth strategy may lose its validity in the democratic regions.
Self-reflection
My knowledge and understanding
From the entire project I have come to know about multiple factors. I have discovered my oven capabilities. With the management of the module, multiple factors have been discovered from my own side which will be helpful for the development of my career in the future. It has been found that an individual cannot achieve a goal if there is no support from the team. As an example,it can be said that, to become an entrepreneur to an owner of the company there’s a lot of hustle. On the other side becoming a manager of a company is not a cut of tea as this involves a lot of hard work to manage a new venture (Mwania, 2017). There is need of team’s cooperation. This understanding will be beneficial for the development of career as well as this understanding within an employee will be helpful for developing a company as well. Now this group project has boosted my confidence will be helpful for future implications. The concept of growth strategy was not quite clear to me. There was knowledge regarding the advantages only but after this project I understood there can disadvantages of the growth strategy as well which may run the company in the negative growth. I tried to give my 100% in the group project. I have my job of investigation regarding the use of growth strategy. I did my research on finding how the growth strategy can be helpful for organisational development. Also, I did my research on finding how the reputed and well known companies have used this strategy for internationalisation and the development of the company. This helped my other team members to reduce confusion regarding the project. Also it was a great opportunity for me to get to know more about the business industry and it works in the international market. Through this project I am able to enhance my communication as well other skills which will be useful in my profession sector.
Future implication
During the project I had a great experience working with the team as every team member was very cooperative. I had multiple confusions regarding the project and I was confused regarding certain factors but the team members were productive as they solved my issues in a short time span. I have also learned lessons for the future group projects (Rahman, 2020). There is a need of understanding in a group project. Also, there is need of contribution for every team member in order to complete a task faster and in effective way. Apart from that, teamwork is more about making each other learn and spreading knowledge that will help to reduce conditions. At the beginning of this group I had multiple misconceptions regarding teamwork. There was a lot of negative thinking in my mind because I know that there can be conflict and argument and misunderstanding among the team members. Now my conception has completely changed after this project. I am willing to do more teamwork in future as it helps to reduce the time for completing a task. There is a difference in theoretical knowledge and its actual practices in real life. I had only theoretical knowledge of the organisational concept and the growth strategy. There was no understanding regarding how this theoretical concept can be applied into practical organisational practices. Currency I am able to understand the whole concept and it will be useful for future implication. I can implement my knowledge in the future to the companies where I am going to work in future.
References
Baltina, A., Bolodurina, M. and Gorbatenko, E., 2018. The application of information technologies in the development of corporate growth strategy. In CEUR Workshop Proceedings (pp. 58-66).
Chen, J., Zhang, L., Tong, H. and Wei, D., 2020, December. Sustainable Competitive Advantages of Chinese Online Travel Agents: Analysis Based on RBV View. In Fifth International Conference on Economic and Business Management (FEBM 2020) (pp. 163-167). Atlantis Press.
Hausmann, R., O’Brien, T., Santos, M.A., Grisanti, A., Kasoolu, S., Taniparti, N., Tapia, J.A. and Villasmil, R., 2019. Jordan: The elements of a growth strategy. CID Working Paper Series.
Lin, H.E., Hsu, I.C., Hsu, A.W. and Chung, H.M., 2020. Creating competitive advantages: Interactions between ambidextrous diversification strategy and contextual factors from a dynamic capability perspective. Technological Forecasting and Social Change, 154, p.119952.
Mwania, W.N., 2017. The relationship between growth strategy and performance of commercial banks in Kenya (Doctoral dissertation, University of Nairobi).
Posey, S.R., 2020. Examining Liquidity, Growth Strategy, Capital Structure, and Earnings Growth.
Rahman, M.S., 2020. The advantages and disadvantages of using qualitative and quantitative approaches and methods in language “testing and assessment” research: A literature review.
Sayers, P., Penning-Rowsell, E.C. and Horritt, M., 2018. Flood vulnerability, risk, and social disadvantage: current and future patterns in the UK. Regional environmental change, 18(2), pp.339-352.
Speldekamp, D., Knoben, J. and Saka-Helmhout, A., 2020. Clusters and firm-level innovation: A configurational analysis of agglomeration, network and institutional advantages in European aerospace. Research policy, 49(3), p.103921.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic management journal, 38(1), pp.42-63.
Zhang, H. and Song, M., 2020. Do first-movers in marketing sustainable products enjoy sustainable advantages? a seven-country comparative study. Sustainability, 12(2), p.450.
Zollo, M., Minoja, M. and Coda, V., 2018. Toward an integrated theory of strategy. Strategic Management Journal, 39(6), pp.1753-1778.
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