Supply Management - refers to the act of identifying, acquiring, and managing

resources and suppliers that are essential to the operations of an organization. Also
known as procurement, supply management includes the purchase of physical
goods, information, services, and any other necessary resources that enable a
company to continue operating and growing. The main goals of supply
management are cost control, the efficient allocation of resources, risk
management, and the effective gathering of information for business decisions.

Supply Chain Mangement - A management system that coordinates and integrates all
o f the activities performed by supply chaiin members into a seamless process, from
the source to the point of consumption, resulting in enhanced customer and economic
value. It allows managers to maximize strengths and efficiencies at each level of the
process to create a highly competitive, customer-driven supply system. Understanding
and integrating ssupply and demand information at every level will allow supply
chain managers to optimize their decisions, reduce waste, and respond quickly to
sudden changes in the supply chain.

Growth strategies usually starts by identifying and accessing opportunities within

your market. They go beyond your business and marketing plans, which detail how
you’re going to meet specific business targets. Growth strategies are important
because they keep your company working towards goals that go beyond what’s
happening in the market today. They keep both leaders and employees focused and
aligned, and they compel you to think long-term. Bad decisions often happen when
you make decisions based on today, instead of an emerging tomorrow.

1. Value Propositions and Business Growth Steps

For a company to expand, it needs to increase its reach with existing target customers
and acquire new ones. To do this, the company must design a value proposition that
clearly states what it does and why customers need it. Then it must create a growth
strategy that provides the steps (i.e. growth moves) the company is going to make to
take new things to market.
2. Brand Relevance and Customer Experience

Even the most recognized brands in the world started from scratch at some point. So
how did they become some of the biggest names in the market? By building relevance
with customers and delivering a distinctive and integrated customer experience.
Building a brand is much more than a logo and a color palette (although those things
are important for brand recognition). Your brand should be recognized by its values
and by how customers experience you – both of which should be highlighted in your
growth strategy.

3. Thinking Long Term Business Growth

Being focused solely on the present and making snap decisions about the future is
never a good idea. Your organization needs to invest time and energy in thinking
about where the world is going and what it means for your customers, partners,
employees, etc. Your growth strategy will help you make good decisions for the
future of your business, even though it might seem uncomfortable to place bets when
even the present seems uncertain.

4. Expanding into the New – Markets, Categories, Customer Segments…

Your company’s core business needs to be solid before you make big expansion
moves. However, outlining longer-term goals will help you to determine the steps you
need to take and measure your progress along the way. Think of it like a road map.
Quick wins and small successes can be mile markers guiding you toward the long-
term goal of expanding into other markets, categories and/or segments.

Market Penetration
Growth through market penetration does not involve moving into new markets or
creating new products; it's an attempt to increase market share using your current
products or services. Carry out this strategy by lowering the price of a product or
service, or by increasing marketing efforts to lure customers away from competitors.

(a) Increase sales to current customers by habituating existing customers to use more.

(b) Pull customers from the competitors’ products to company’s products maintaining
existing customers intact.

(c) Convert non-users of a product into users of the product and making potential
opportunity for increasing sales.

Product Development
Product development means creating new products to serve the same market. For
example, a company that produces ice cream for institutional buyers expands its line
to include gelato and sorbet. The company can sell these new products to existing
customers and grow its business without tapping new markets
(a) Expand sales through developing new products.

(b) Create different quality versions of the product.

(c) Develop additional models and sizes of the product to suit the varied preference of
the customers.

Market Development
Market development involves introducing your products or services to new markets.
You may want to enter a new city, state or even country. Or you can target a market
segment. For instance, a bakery that produces breads for the consumer market could
enter into the commercial market by baking breads for restaurants and retailers.

(a) By adding new distribution channels to expand the consumer reach of the product.

(b) By entering new market segments.

(c) By entering new geographical markets.

Diversification
Diversification is the most radical form of growth. It involves creating a totally new
product for a completely new market. This is the riskiest growth strategy because it's
the most uncertain. Failure is a distinct possibility, although the potential of a high
payoff may be worth the risk for companies with sufficient financial means.
Diversification in turn can be classified into three types of diversification strategies:
Concentric/Horizontal diversification (or related diversification): entering a new
market with a new product that is somewhat related to a company’s existing product
offering
Conglomerate diversification (or unrelated diversifcation): entering a new market
with a new product that is completely unrelated to a company’s existing offering
Vertical diversification (or vertical integration): moving backward or forward in the
value chain by taking control over activities that used to be outsourced to third parties
like suppliers, OEMs or distributors

Internal growth (or organic growth) is when a business expands its own operations by
relying on developing its own internal resources and capabilities. This can for
example be done by assessing a company’s core competencies and by determining
and exploiting the strenght of its current resources with the aid of the VRIO
framework. Moreover, companies can decide to grow organically by expanding
current operations and businesses or by starting new businesses from scratch (e.g.
greenfield investment). Important to note here is that all growth is established without
the aid of external resources or external parties. Internal growth has a few advantages
compared to external growth strategies (such as alliances, mergers and acquisitions):

Knowledge improvement: organic growth strategies improve the company’s

knowledge through direct involvement in a new market or technology, thus providing
deeper first-hand knowledge that is likely to be internalized in the company
Investment spread: gradually growing internally helps to spread investment over time,
which allows a reduction of upfront costs and commitments, making it easier to
reverse or adjust a strategy if conditions in the market change
No availability constraints: the company is not dependent on the availability of
suitable acquisition targets or potential alliance partners. Organic developers also do
not have to wait for a perfectly matched acquisition target to come on to the market
Strategic independence: this means that a company does not need to make the same
compromises as might be necessary in an alliance, for example, which is likely to
involve constraints on certain activities and may limit future strategic choices
Culture management: organic growth allows new activities to be created in the
existing cultural environment, which reduces the risk of culture clash—a common
difficulty with mergers, acquisitions, and alliances
Internal growth strategies have a few disadvantages. For instance, developing internal
capabilities can be slow and time-consuming, expensive, and risky if not managed
well.
Competitive strategy is a long-term action plan of a company which is directed to gain
competitive advantage over its rivals after evaluating their strengths, weaknesses,
opportunities and threats in the industry and compare it with your own. Michael
Porter, a professor at Harvard presented competitive strategy concept. According to
him there are four types of competitive strategies that are implemented by businesses
globally. It is necessary for businesses to understand the core principles of this
concept that will help them to make a well-informed business decisions in the course
of action.

1. Rivalry among existing competitors - This looks at the number and strength of your
competitors. How many rivals do you have? Who are they, and how does the quality
of their products and services compare with yours?Where rivalry is intense,
companies can attract customers with aggressive price cuts and high-impact
marketing campaigns. Since there is many competitors, you can lower the price of
your product or engage in advertising that will result to decrease in profit margin.
2. Threat of New Entrants - refers to the capacity of new business to gain a market
share and share thr pie to others. Profitable markets attract new entrants, which erodes
profitability. Unless incumbents have strong and durable barriers to entry, for
example, economies of scale, customer loyalty, capital requirement, cumulative
experience, government policy and access to distribution. This prevent the new
competitors to enter into the market
3. Threat of substitute - Fulfills the same need as to other products. It increases the
possibility that customers switch to alternative therefore, we should be mindful to
products branded by competitors. Where close substitute products exist in a market, it
increases the likelihood of customers switching to alternatives in response to price
increases. This reduces both the power of suppliers and the attractiveness of the
market. In this way, the company need to lower the price or engage in advertising as
well that will lead to decrease in profit margin.
4. Bargaining power of suppliers - How much power and control a supplier raise its
price and reduce the quality. The suppliers were in better position if there are only few
of them. . An assessment of how easy it is for suppliers to drive up prices. This is
driven by the: number of suppliers of each essential input; uniqueness of their product
or service; relative size and strength of the supplier; and cost of switching from one
supplier to another.
5. Bargaining power of buyers - Customers to put the company under pressure by
driving the price and exert control over the price. Buyers has lot of power if there are
many of them and there are alternatives to buy from. An assessment of how easy it is
for buyers to drive prices down. This is driven by the: number of buyers in the
market; importance of each individual buyer to the organization; and cost to the buyer
of switching from one supplier to another. If a business has just a few powerful
buyers, they are often able to dictate terms. So, through loyalty programs and product
differentiation, the company somehow could maintain its customers.