When companies are trying to start, expand or save their business they are forced to choose a business growth strategy to achieve the goals set. There are two main options for companies to grow: Organically, with the own and internal resources of the company or inorganically with the help of external cooperation. Before choosing one of these growth options companies have to thoroughly evaluate which strategy is best for them, as every strategy has its advantages and disadvantages and the strategy has to fit the current economy situation of the companies. There are several of factors which the companies have to consider for a successful implementation of the growth strategy.
Table of Contents
- 1. Introduction
- 1.1 Statement of the problem
- 1.2 Approach of this paper
- 2. Concepts and strategies of business growth models
- 2.1 Organic business growth
- 2.1.1 The Ansoff Matrix
- 2.1.2 Success factors
- 2.2 Inorganic business growth
- 2.2.1 Alliances
- 2.2.2 Mergers & Acquisitions
- 2.2.3 Success factors
- 2.1 Organic business growth
- 3. Practical analysis of business growth strategies
- 3.1 Sony
- 3.2 Cisco Systems
- 4. Critical appraisal
- 4.1 Advantages and disadvantages
- 4.2 Which strategy to choose?
- 5. Conclusion
Objectives and Key Themes
This paper aims to provide a comprehensive overview of business growth strategies, specifically focusing on organic and inorganic growth. It explores the theoretical frameworks underpinning each approach and examines practical examples to illustrate their application. The paper also critically appraises the advantages and disadvantages of each strategy to assist in informed decision-making. * Defining and differentiating organic and inorganic growth models. * Analyzing the success factors for both organic and inorganic growth strategies. * Examining practical case studies of companies employing these strategies. * Critically comparing the advantages and disadvantages of each approach. * Exploring the decision-making process for choosing between organic and inorganic growth.Chapter Summaries
1. Introduction: This introductory chapter sets the stage by defining the central problem: the critical decision companies face when choosing between organic and inorganic growth strategies. It highlights the significant consequences of making a wrong decision, emphasizing the potential for reputational damage, loss of customers, and financial setbacks. The chapter then outlines the structure and objectives of the paper, promising a theoretical exploration of both growth models, practical examples, and a critical appraisal to aid understanding. 2. Concepts and strategies of business growth models: This chapter delves into the theoretical underpinnings of business growth, acknowledging the lack of a universally accepted definition. It introduces Penrose's influential work, highlighting the dual nature of business growth as both quantitative (increase in output, sales, etc.) and qualitative (improvements in quality, customer relations). The chapter then focuses on the two main paths to growth: organic and inorganic, laying the groundwork for a more detailed examination in subsequent sections. A business growth tree is visually presented to give an overview of the concepts. 3. Practical analysis of business growth strategies: This chapter moves from theory to practice, offering case studies of Sony and Cisco Systems to exemplify organic and inorganic growth strategies, respectively. The chapter likely analyzes how each company approached growth, highlighting the specific strategies employed, the challenges encountered, and the resulting outcomes. This practical application serves to solidify the theoretical concepts discussed in previous chapters. 4. Critical appraisal: This chapter critically assesses the advantages and disadvantages of both organic and inorganic growth strategies. It likely presents a comparative analysis, weighing the pros and cons of each approach in detail. A key element of this chapter will likely be to identify circumstances under which one strategy is preferable to the other, considering factors such as market conditions, company resources, and risk tolerance. It provides a framework for selecting the optimal growth strategy based on the specific context.Keywords
Business growth strategies, organic growth, inorganic growth, Ansoff Matrix, mergers & acquisitions, alliances, strategic management, success factors, case studies, Sony, Cisco Systems, competitive advantage.
Frequently Asked Questions: Business Growth Strategies
What is the main topic of this paper?
This paper provides a comprehensive overview of business growth strategies, focusing on organic and inorganic growth. It explores the theoretical frameworks, examines practical examples, and critically appraises the advantages and disadvantages of each strategy to aid informed decision-making.
What are the key themes explored in the paper?
The key themes include defining and differentiating organic and inorganic growth models, analyzing success factors for both, examining case studies, critically comparing advantages and disadvantages, and exploring the decision-making process for choosing between organic and inorganic growth.
What types of business growth are discussed?
The paper primarily focuses on two types of business growth: organic growth (internal expansion) and inorganic growth (external expansion through mergers, acquisitions, or alliances).
What theoretical frameworks are used?
The paper draws upon relevant theoretical frameworks, including (but not limited to) the Ansoff Matrix and likely references to Penrose's work on the dual nature of business growth (quantitative and qualitative).
What are some practical examples used in the paper?
The paper uses case studies of Sony and Cisco Systems to illustrate organic and inorganic growth strategies respectively. These case studies analyze how each company approached growth, highlighting strategies employed, challenges faced, and outcomes.
What are the advantages and disadvantages of organic growth discussed?
The paper critically appraises the advantages and disadvantages of organic growth, likely considering factors like lower risk, better control, and potential slower growth compared to inorganic strategies. Specific details are provided within the "Critical Appraisal" chapter.
What are the advantages and disadvantages of inorganic growth discussed?
Similarly, the paper analyzes the advantages and disadvantages of inorganic growth, such as faster expansion, access to new markets or technologies, but also higher risk, integration challenges, and potential high costs. A detailed comparison is presented in the "Critical Appraisal" chapter.
How does the paper help in choosing a growth strategy?
The paper aims to provide a framework for selecting the optimal growth strategy based on the specific context. It considers factors such as market conditions, company resources, and risk tolerance to help decision-making.
What is the structure of the paper?
The paper is structured into five chapters: Introduction, Concepts and strategies of business growth models, Practical analysis of business growth strategies, Critical appraisal, and Conclusion. Each chapter is summarized within the document.
What keywords describe the paper's content?
Keywords include: Business growth strategies, organic growth, inorganic growth, Ansoff Matrix, mergers & acquisitions, alliances, strategic management, success factors, case studies, Sony, Cisco Systems, competitive advantage.
- Quote paper
- Tim Meierkord (Author), 2016, Analysis of growth strategies. Organic vs. inorganic growth, Munich, GRIN Verlag, https://www.grin.com/document/379821
