1. Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer

2. Growth  Growth strategies are used to increase and expand a company’s operations  Growth is often necessary for the long- term survival of thriving companies

3. Strategies  Concentration  Diversification  Vertical Integration

4.  Involves growth by expanding existing businesses  Focuses efforts towards a single market

5. Concentrated Companies  McDonalds, Wal-Mart and Starbucks  All growing by concentrating on their primary business areas and domestic expansion

6. Example McDonald’s locations by country

7. Advantages  Reduces resources needed to increase market share  Low risk in growing markets  Allows companies to specialize in specific markets  Less change and easier decision making

8. Disadvantages  Limited domestic growth  Can be high risk as you are putting all your eggs in one basket  Very dependant on domestic economy

9.  Involves adding products, services, locations, customers, and markets to your company’s portfolio  Allows companies to reach new audiences

10. Types of Diversification  Concentric – new venture strategically related to existing business  Conglomerate – new venture that has no strategic fit or relationship with existing business

11. Concentric Diversification  Coca-Cola’s acquisition of Minute Maid

12. Conglomerate Diversification  Nestlé’s acquisition of Georgio Armani

13. Advantages  Control of inputs leading to continuity  Provides better risk control  Provides movement away from declining activities  Take advantage of existing expertise  Reach new markets

14. Disadvantages  May result in slowed growth in its core business  Adding management costs  Losses may be incurred during market consolidation  Cross-nation diversification may be met with varying, political and legal, requirements.

15.  Form of diversification  Involves growth by acquiring companies up or down the supply chain  Backwards, Forwards or Balanced

16. Backwards Vertical Integration  Acquiring suppliers Tire Company Glass Company Metal Company

17. Forward Vertical Integration  Acquiring distributors Bottler Coke Machines

18. Balanced Vertical Integration  Acquiring distributors & suppliers Design Production Retail Stores Distribution Advertising

19. Advantages  Lower transactional costs  Synchronization of Supply & Demand  Quality assurance  Strategic Independence

20. Disadvantages  Higher coordination costs  Monopolization of markets  Higher costs when switching suppliers/ buyers

21. Lets Review

22. Concentration  Growth by focusing on expanding a primary business in a single market  Can involve international expansion but mostly concentrated on domestic

23. Diversity  Growth by expanding the markets, products, locations or services a company offers  Concentric: acquiring related companies  Conglomerate: acquiring unrelated companies

24. Vertical Integration  Growth by acquiring companies backwards or forwards in the supply chain  Forwards: acquire distributors  Backwards: acquire suppliers