Intensification strategy is followed when adequate growth opportunities exist in the firm's current products-market space. It includes three sub-categories : Market Penetration: It involves gaining extra share of a company's current market using existing products. Do you want your startup to be an even bigger success? . If neither of these offers sufficient potential, a business may consider diversification to achieve further growth. Organic growth is created by adding a new clientele base or extracting more business from current clients. The new lines of business may be related to the current business or may be quite unrelated. 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. Read our privacy policy. Often, in such cases, a business consumes a lot of its resources without borrowing anything from outside to expand its operations and grow the company. If the willingness is absent, it is known as takeover. Everything you need to know about the types of growth strategies. This form of purchase is also called as consent takeover. This strategy seeks to enhance the long-term competitive advantage of the firm by forming alliances with its competitors existing or potential in critical areas instead of competing with others. These strategies are broadly classified as: The firm pursues intensive growth strategies with an objective to achieve further growth of existing products and/or existing markets. Each strategy has a different level of risk, with market penetration having the lowest risk and diversification having the highest risk. Maybe youve hit a deadlock at your business. Many companies expand by creating other firms in their same line of business. Intensification involves expansion within the existing line of business. Such an approach is very useful for enterprises that have not fully exploited the opportunities existing in their current products-market domain. 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. As a strategy the purchaser keeps his identity a secret. Growth Strategies, Growth Expansion Strategies, Market Expansion Growth Other examples- include the V-Guard, Reliance, LG, Samsung, Hyundai, General Electric, etc. It is common for a firm to begin with exporting, progress to licensing, then to franchising finally leading to direct investment. Strategies of Economic Development: Balanced Vs. Unbalanced Growth, Types of Pricing Strategies: Top 10 Strategies, Foreign Investment by Multinational Companies (Alternative Methods). (a) Increase sales to current customers by habituating existing customers to use more. The purpose of diversification is to allow the company to enter lines of business that are somewhat different from current operations. Intensive growth strategies aim at achieving further growth for existing products and/ or in existing markets. intensification strategy involves three alternatives:- 1)MARKET PENETRATION STRATEGY:- In this case the firm continues with its . MBA Knowledge Base 2021 All Rights Reserved, Prescriptive and Emergent Approaches to Corporate Strategy, Most Important Strategic Options in Business, Reasons for the Increased Diversification by Business Firms, Strategic Planning Process - Five Stages of Strategic Planning Process, ADL Matrix - The Arthur D Little Strategic Condition Matrix, Role of Management in Improving Workplace Safety and Health. Diversification strategy is one of the four main strategies for growth identified by Igor Ansoff in 1957, which enables companies to look at other markets they could tap into, or new products they could launch to . Takeover may be defined as a transaction or series of transactions whereby an individual or group of individuals or company acquires control over the management of the company by acquiring equity shares carrying majority voting power. Internal growth strategies provide companies with: Despite the rewards of organic growth, when equated to inorganic growth, there are still some limits associated with relying on this type of growth. Examples of successful growth strategies. Mutual understanding and trust are the basic tenets of strategic alliances. Internal. Your pages will perform better and rank higher up on Googles SERP (search engine results page). Its, in essence, growing your sales from within using the resources you have, including skills, data, capabilities, connections, and other tools. However, if effective, it can result in some of the utmost heights of internal growth. Such growth may be possible via mergers, takeovers, joint ventures, strategic alliances etc. Always plan quick sit-downs with your staff members every few days as you deem possible to get their feedback, which may give you some innovative idea that you had not thought of or reaffirm what you had thought of initially. When firms use their existing base to expand in the direction of their raw materials or the ultimate consumers, or, alternatively they acquire complimentary or adjacent businesses, integration takes place.
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