Growth Accelerators Business Growth Strategies

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GROWTH ACCELERATERS • 1 2 •REASONS FOR GROWTH GROWTH INDICATORS INCREASE IN RISKS OF GROWTH

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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] VERTICALBASE 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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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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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

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CONGLOMERATE DIVERSI’N

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