The horizontal integration will increase the monopolistic tendency in the market. Lesser risk than external growth (e.g., takeovers), Can be financed through internal funds (e.g., retained profits), Builds on a business assets (e.g., brands, customers), Permits the business to grow at a more practical rate. In order to grow and achieve its goals, the business can consider these five internal growth strategies for internal growth: Growth is an ongoing process. Once you have figured out your customers needs, you need to tailor your CTAs accordingly, and you will be able to crack the deals. The basic classification of intensive growth strategies: These strategies are also called organic growth strategies. If you enjoyed reading this, dont forget to share. Protective rights merely allow a co-venturer to protect its interests in the venture in situation where its interests are likely to be adversely affected. In a tender offer, one firm offers to buy the outstanding stock of the other firm at a specific price and communicates this offer in advertisements and mailings to stockholders. This combination may be either through absorption or consolidation. This is done by increasing its sales force, appointing new channel partners, sales agents or manufacturing representatives and by franchising its operation; or (b) the firm can expand sales by attracting new market segments. It occurs when a company uses its already existing resources and capital to grow. Such growth may be possible via mergers, takeovers, joint ventures, strategic alliances etc. Most tend to be patents, trademarks, or technical know-how that are granted to the licensee for a specified time in return for a royalty. Occasionally, shareholders might favor inorganic growth because it proposes swift growth to kick its share price. In a purchase of assets, one firm acquires the assets of another, though a formal vote by the shareholders of the firm being acquired is still needed. Increasingly, cooperative strategies are formed by firms competing against one another, as shown by the fact that more than half of the strategic alliances (a type of cooperative strategy) established within a recent two-year period were between competitors such as FedEx and the U.S. a internal and external type of growth. It is common for a firm to begin with exporting, progress to licensing, then to franchising finally leading to direct investment. Some of the types of growth strategies are as follows:-, 1. Internal growth is a singular undertaking the company uses its own resources and strengths to grow rather than relying . (h) Common advertising and sales promotion. Intensification Strategy Checklist. As the firm achieves success at each stage, it moves to the next. A strategic alliance integrates the synergetic talents of alliance partners. These forms of takeover are resorted to bailout the sick companies, to allow the company for rehabilitation as per the schemes approved by the financial institutions. Copyright 10. Firms adopting this strategy can have a regular and uninterrupted supply of raw materials components and other inputs and the quality is also assured. The motives behind strategic alliances are to reduce cost, technology sharing, product development, market access, availability of capital, risk sharing etc. In theory, the acquirer must buy more than 50% of the paid-up equity of the acquired company to enjoy complete control. Market Expansion Strategy: All You Need To Know. PDF F.Y.B.Com. - Commerce-I V.G. Vaze College. MODULE - I CHAPTER - 1 The element of willingness on the part of the buyer and seller distinguishes an acquisition from a takeover. The takeovers are subject to the regulations contained in SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997. But in practice, however effective control maybe exercised with a smaller shareholding, because the remaining shareholders scattered and ill-organized are not likely to challenge the control of acquirer. Recognizing your ideal audience can help you offer them better services or products any which way you can. Overtrading: If a business grows outside its resources (took too many orders, unable to control costs/manage human resources), it surely is bound to fail. For companies which aim to be always competitive, the Ansoff matrix can be a regular analytical tool for checking this competitiveness.
Share this article