Chapter 13 Strategies for Growth and Managing the Implication of Growth

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Chapter13

Strategies For Growth And Managing The Implications

Of Growth

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Growth Strategies

Penetration Product Development

Market Development Diversification

Market

Product

Existing

New

NewExisting

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StrategiesPenetration- Growth By Selling More Of

Existing Product To Existing CustomersMarket Development

New Geographic MarketNew Demographic MarketNew Product Use

Product Development- Sell New Products To Existing Customers

Diversification- Sell New Product To New Market

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Product IntegrationRaw Materials Producer

Raw Materials Wholesaler

Manufacturer

Finished Goods Wholesaler

Retailer

Customer

Backward Integration

Forward Integration

Horizontal Integration

Horizontal Integration

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Pressures On Firm Growth1. Existing Financial Resources

2. Human Resources

3. Management Of Employees

4. Entrepreneur’s Time

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Overcoming Financial Resources Pressure•Manage Cash Flow- Budget vs. Actual

•Manage Inventory•Manage Fixed Assets•Manage Costs/Profits- Compare Actual vs. Standard Percentages

•Taxes•Record Keeping

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Inventory ValuationFIFO- First Items In Inventory = First Sold

LIFO- Last Items In Inventory = First Sold

Convert To LIFO When:Anticipate Increased Labor, Materials,

Production CostsBusiness/Inventory GrowingComputer-Assisted Inventory ControlBusiness Is Profitable

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Overcoming Human Resources Pressures

Prepare Job DescriptionsItemize SpecificationsOutsource HR Responsibilities

Recruiting Hiring Establish Benefit Programs Payroll Firing Permanent vs. Part-Time Corporate Culture

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Overcoming Employee Management PressureParticipative ManagementEstablish Team SpiritCommunicate- Open & Frequent

Provide FeedbackDelegateContinuous Training

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Overcoming Entrepreneur’s Time Management Pressure

Efficient Use of Time is Critical at Start-up and Growth

Increase ProductivityIncrease Job SatisfactionImprove Interpersonal Relationships

Reduce Time Anxiety/TensionBetter Health

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Time Management Principles

1. Desire- Willpower To Optimize Time;Recognise oneself as a time-waster.

2. Effectiveness- Focus On Important Issues3. Analysis- Determine How Time is currently

spent and Where Time Is Being Wasted4. Teamwork- Small Amount Of Time Can Be

Controlled5. Prioritize- Deal With Most Important Tasks

First, Plan Ahead and Focus on the Key Issues

6. Reanalysis- Review Process, Delegate

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Growth Categories

Unused Potential Actual Growth

Little Potential Constrained

Professional Management

Growth Aspirations

High

Low

YesNo