Alternative Growth Strategies

• Market Penetration
• Selling more of the existing product to the current customer base
• By increasing the customer base within the same market
• Market Development
• Same product sold in new markets
• Product Development
• New products in the same target market
• Diversification
• New products sold in new markets
• Very resource intensive
• Higher Risk
Decisions on the Direction to Grow
• Markets to be active in
• New geographical areas
• Existing markets and customer base
• Path to Reach the Market
• Organic Growth – Slow but good learning
• Inorganic Growth- Speedy but have less control
• Selling Points
• Lower price of the product
• Better product features for the same price
• Custom made features
• The image that brand carries
• Greater dependability
Decisions on the Direction to Grow
• Moves to Achieve Goal
• The speed at which the growth is to be achived
• Eg : Inorganic growth vs Organic Growth
• Sequencing of the moves
• Financial Sense of Venture
• The ability of organisational growth to add to the net profit
• Some ventures lead to outright profitability due to premium positioning
• Some may add to economies of scale and ultimately lead to profitability
Additional Attributes Affecting
Growth
• Industry Attractiveness
• Industry attractiveness is determined by Porter’s 5 force analysis
• If the combination is low it is attractive
• This decision also depends on the growth of industry as a whole

• Tata Nano
• Product Development Strategy
• Introduced first in India, a known territory
• Expanded in Similar markets like Latin America, Africa, Asia, etc.
Illustrations
• Bharat Forge Limited
• Diversification Strategy
• Product Range
• Crankshafts, Axle Beams, Transmission parts, etc.