06 GROWTH ACCELERATERS-11-4
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GROWTH ACCELERATERS • 1 2 •REASONS FOR GROWTH GROWTH INDICATORS INCREASE IN RISKS OF GROWTH
FO
WIM 11/BUZ GROWTH STRATEGIES
3 GROWTH STRATEGIES INTESSIVE STR’GY DIVERCI’N STR’GY REASONS DIVERCI’N RISK TYPES SYNERGISTIC CONGLOMERATE
4 EXTERNAL STRATEGIES MERGERS AQUIZITIONS ADVANTAGES DIS ADVANTAGES JOINT VENTURES ADVANTAGES DIS ADVANTAGES
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WIM 11/BUZ GROWTH STRATEGIES
• 1 •REASONS FOR GROWTH •NATURAL URGE •SURVIVAL •MKT SHARE •LEADERSHIP COMPE’N •DIVERSIFICATION RISK •RESOURCES USAGE •OPPORTUNITIES •ORG’AL MOTIVQTION •PROMOTOERS REASONS
2 GROWTH INDICATORS INCREASE IN NETWORTH TOTAL ASSETS BUZ VALUES MKT SHARE PROD’T LINES /MKT’S INTELLECTUAL PROPERTIES PROFITS RISK OF GROWTH DEMAND FALL BASE ACTIVITY NEGLECTED AFFECTS BASE ACTIVITIES LOSS OF -TAX LAW – EXEMPTION /SUBSIDIES/
COMPETI’S/ IND. LEADER AGRESSIVE
3 GROWTH STRATEGIES INTESSIVE STR’GY MKT PENETRATION DIVERCI’N RISK MKT DEVELOP’T FAILURE PRODUCT DEVE’T LOSS AFFECTS BASE INTEGRATIVE STR’GY [TELCO & TATA HORIZONTAL MOTORS] VERTICALBASE NEGLECTED FORWARD-BACKWARD AGGRESSIVE DIVERCI’N STR’GY COMPE’RS REASONS TYPES SATURATION SYNERGISTIC ADD OPPORTUNITIES MKT SYNERGY RISK MINIMIZATION OPERATIONAL STRENGTH EXPLO’N SYN’GY [RELIANCE] INVESTMENT INTEGRATING BENEFITS SYN’GY COMPETETIVE STR’GY MGT SYNEGY RELATED DIVER’N CONGLOOMERATE CONSOLIDATION INSPIRATION
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FOO 4 EXTERNAL STRATEGIES MERGERS AQUIZITIONS ADVANTAGES NEW TECHNOLOGY ADD MKT SHARE MKT NETWORK NO GESTATION PERIOD REDUCE COMPETITION COST EFFECTIVE DIS ADVANTAGES FAILURE RISK HIDDEN PROBLEMS IN CORRECT EVALUTION MATCTHING EXPERTISE CUTURAL INTEGRATIO
JOINT VENTURES ADVANTAGES UP GRADED TECHNOLOGY NEW MKT /AREAS FOREIGN EQUITY PARTICIPATION RAISING CAPITAL MANGERIAL EXPERTISE PRE EMPT COMPETITIONCOMPETITIVE ADVANTAGE- [DOMESTIC + GLOBAL MKTS]
ENHANCE PRODUCTIVITY DIS ADVANTAGES OBSCELETE TECHNOLOYG PASSED HIGH COST OF M/C’S & PLANTS TECHN’GY RIGID AGREEMENT NO SUITABLE DOMESTIC MKT MGT CONTROL DOMINANCE
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F1
BUZ GROWTH
REASONS FOR GROWTH
NATURAL URGE
PROMOTORS REASONS ORGA’AL MOTIVATION
SURVIVAL
MKT SHARE INDUSTRY LEADERSHIP
REASONS
COMPETITION
OPPORTUNITITIES RESOURCES USAGE
DIVERSIFICATION
GROWTH INDICATORS PROFITS
NET WORTH
TOTAL ASSETS
INTELLECTUAL PROPERTIES
GROWTH INDICATORS
BUZ VOLUME
NEWPRODUCT LINES/ MKTS
MKT SHARE
RISK OF GROWTH COMPETITORS AGGRESSIVE
DEMAND FALL
UN CONTROLLABLE MGT RISKS OF GROWTH
FAILURE AFFECT BASE ACTIVITY CORE ACTIVITY NEGLECTED
LOST- TAX- LAW / SUBSIDIES EXEMPTION
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F2
GROWTH STRATEGY INTERNAL
EXTERNAL
• INTENSIVE
• MERGERS AQUIZITIONS/
INTEGRATIVE
• COLLABORATIONS / JOINT VENTURES
DIVERSIFICATION •INTENSIVE STRG’Y
STRT’GY •MKT PENETRATION
•MKT DEVELOPMENT PRODUCT DEVELOPMENT
•PRODUCT DEVELOPMENT
INTENSIVE
MEANING •INCREASE SALE IN CURRENT MKT/ IN PRESENT PRODUCTS•REPOSITION – TO INCREASE CONSUMPTION •PULL CUSTOMERS- CHEAP- ECONOMICAL MODELS / GIFTS •CONVERT NON USERS- POWDER TO PASTE •NEW DISTRIBUTION CHANNEL •NEW ECONOMICAL SEGMENT •NEW GEOGRAPHIC MKT • PRODUCTS TO COVER WIDE SEGMENTS
•MKT PENETRATION •MKT DEVELOPMENT EX •TOOTH PASTE- AS HEALTH /HYGINE •ANCHOR WHITE + BRUSH COLGATE •HUL-SANGAM DISTRIBUTION •HUL- WHEEL POWDER •LOCAL→NATIONAL →INT’AL COLGATE-WHITE /GEL /SENSITIVE
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F2/1
•INTENSIVE STRG’Y •HORIZONTAL STRT’GY
INTEGRATIVE
•VERTICAL
MEANING
EX
•HORIZONTAL
•INTEGRATING AT SAME LEVEL /INDUSTRY-AQUIRING ONE/ MORE COMPETITORS
• VIP- [BLOW PLAST] AQUIRED UNIVERSAL [ARISTROCRAT ]
•VERTICAL
•ACQU’N AT DIFFERENT LEVEL -OF SAME INDUSTRY •BACKWARD- LEVEL DOWN - FORWARD- LEVEL UP
•NIRMA- AQUIRED- “LAB” MAKER •BROOK BOND- TEA PLANTATION
DIVERSIFICATION STRT’GY
•ADDITION OF NEW PRODUCT LINES- RELATED / UN RELATED
•VIDEOCON [ RELATED]- THOMPSON /DEWOO /GRUNDIG /SANSUIE /MAHARAJA /KENSTAR /WHITE LINE [11] •WIPRO- [UNRELATED]- BULB / SOAP /COMPUTERS /IT /OIL /BPO REASON FOR DIVERSIFICATION •CONSOLIDATION •AMBUJA ACC /MANGLAM /HOLCIM
•SATURATION /DECLINE PHASE •TIMES MUSIC /BANK / BAZAR
•COMPETITIVE STRATEGY •AMUL TEA /COFFEE /PIZZA
•ADD OPPORTUNITIES •ITC IT /HOTEL/PAPER /CARDS
•STRENGTH /RESOURCES USAGE •RELIANCE FAITH
•REASONS
•SPREAD RISK •VIDEOCON11+ BRANDS/OIL/RETAIL
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F2/2
DIVERSIFICATION RISKS •FAILURE /LOSSES•HULMODERN BREAD
•COPETITORS AGGRESSIVE•ITC– SUNFEAST & PARLE
•RISKS
•BASE ACTIVITY NEGLECTED•VOLTAS- A/C’S TO COMPRESSORS
•IMPACT ON BASE ACTIVITY •TELCO – TATA MOTORS
DIVERSIFICATION TYPES •MGT SYNE’GY
•MKT’G SYNERGY •SYNERGISTIC
•INVESTMENT SY’GY TYPES
•OPERATIONAL SYN’GY
MEANING / ACTIVIES
EX
•MKT’G SY’GY
•PRODUCT WITH COMMON –SALES FORCE /DISTRIBU’N /
•HUL-
BREAD
•OPER’AL SY’GY
•COMMON FACILITIES - PEOPLE /PURCHASE /PROD’N
•GODREJ-
FUNITURE /WASH M/C’S /FRIDGE
•INVES’ SY’GY
• USE OF SAME TECHNOLOGY /COMPONENTS
•VIDEOCON-
MGT SY’GY
•EXISTING MGT SKILLS /EXPERTISE
•FILM PRODU’N- TO TV SERIALS
11+ BRANDS
CONGLOMERATE •NEW BUZ HAVE NO RELATION SHIP WITH PRESENT
•ITC- TOBACO /PAPER /BICUITS /HOTELS
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F3
EXTERNAL GROWTH STRATEGY
M & AQUI’N GROUP
AQUISITIONS
RP GOENKA
•DUNLOP / CEAT TYRE /PHILIPS CARBON BLACK /GRAMOPHONE CO
VIJAY MALLYA UB GROUP
•BEST & CROMPTON /MANGLORE CHEM & FERT’S /KISSAN FOODS /UNITEL / •UNITED BREWIERIES /HERBERTSON /McDOWEL /
OTHERS
AJAY PIRAMAL /AV BIRL GROUP /TATAS / RELIANCE [BSES /IPCL /FLAG CABLES ]
ADVANTAGES •TECHNOLOGY
•LOW INVESTMENT •ELIMINATE COMPETITION •NO GESTATION PERIOD
•ADVANTAGES
•SURE BUSINESS /MKT SHARE • READY INFRASTRUCTURE
DIS ADVANTAGES •RISK -FAILURE /FINANCIAL•HIDDEN- PROBLEMS •LACK -OF EXPERTISE
•DIS ADVANTAGES
•INACCURATE- EVALUTION •SURPLUS –DE MOTIVATED FORCE
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COLLABORATION /JV
ADVANTAGES • START-
•UP GRADED- TECHNOLOGY
EXPORT
•MANAGERIAL- EXPERTISE •RAISE- CAPITAL / FOREX
•ADVANTAGES
•NEW-
DOMAIN ENTRY
• HIGH-
PRODUCIVITY
DIS ADVANTAGES •MGT-
CONTROL
•TECHNOLOGY- ADOPTION
•DIS ADVANTAGES
•OUT DATED -
TECHNOLOGY
•OVER -
VALUTION
•AGREEMENT- CONSTRAINS
END
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F4 GROWTH STRATEGIES
INTENSIVE GROWTH
INTEGRATIVE GROWTH
BACKWARD INTEGRATION
MRT PENETR’N
MKT DEVEL’T
DIVERSIFICATION GROWTH
HORIZONTAL INTEGRATION
FORWARD INTEGRATION
PRODUCT DEVEL’T
CONCENTRIC DIVERSI’N
HORIZONTAL DIVERSI’N
06 GROWTH ACCELERATERS-11-4
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CONGLOMERATE DIVERSI’N
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06 GROWTH ACCELERATERS-11-4
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