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    Growth Strategy: What Are Growth Strategies?

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    Vedant Raj
    A growth strategy is a plan to advance and achieve growth in areas like manufacturing, marketing, and finances. There are several types of growth strategies, including horizontal integration which involves acquiring a similar company in the same industry, vertical integration which involves acquiring a company in the supply chain process, diversification which involves expanding into new markets and products, and intensification which focuses on expanding within existing lines of business. Examples provided include Vodafone-Idea merging after market challenges from Jio, Target vertically integrating its supply chain, HubSpot diversifying its software, and McDonald's using market penetration for intensification.

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    Growth Strategy: What Are Growth Strategies?

    Uploaded by

    Vedant Raj
    49 views4 pages
    A growth strategy is a plan to advance and achieve growth in areas like manufacturing, marketing, and finances. There are several types of growth strategies, including horizontal integration which involves acquiring a similar company in the same industry, vertical integration which involves acquiring a company in the supply chain process, diversification which involves expanding into new markets and products, and intensification which focuses on expanding within existing lines of business. Examples provided include Vodafone-Idea merging after market challenges from Jio, Target vertically integrating its supply chain, HubSpot diversifying its software, and McDonald's using market penetration for intensification.

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    A growth strategy is a plan to advance and achieve growth in areas like manufacturing, marketing, and finances. There are several types of growth strategies, including horizontal integration which involves acquiring a similar company in the same industry, vertical integration which involves acquiring a company in the supply chain process, diversification which involves expanding into new markets and products, and intensification which focuses on expanding within existing lines of business. Examples provided include Vodafone-Idea merging after market challenges from Jio, Target vertically integrating its supply chain, HubSpot diversifying its software, and McDonald's using market penetration for intensification.

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    © All Rights Reserved
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    49 views4 pages

    Growth Strategy: What Are Growth Strategies?

    Uploaded by

    Vedant Raj
    A growth strategy is a plan to advance and achieve growth in areas like manufacturing, marketing, and finances. There are several types of growth strategies, including horizontal integration which involves acquiring a similar company in the same industry, vertical integration which involves acquiring a company in the supply chain process, diversification which involves expanding into new markets and products, and intensification which focuses on expanding within existing lines of business. Examples provided include Vodafone-Idea merging after market challenges from Jio, Target vertically integrating its supply chain, HubSpot diversifying its software, and McDonald's using market penetration for intensification.

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    © All Rights Reserved
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    Download as pdf or txt
    of 4

    Growth Strategy

    What are Growth Strategies?

    A growth strategy is one under which management plans to advance


    further and achieve growth of the enterprise, in fields of
    manufacturing, marketing, financial resources etc. As growth entails
    risk, especially in a dynamic economy, a growth strategy might be
    described as a safest policy of growth-maximising gains and
    minimising risk and untoward consequences.
    1. Horizontal Integration

    When a company wishes to grow through horizontal integration, its aim is


    to acquire a similar company in the same industry. Companies may choose
    to undergo horizontal integration in order to increase their size, diversify
    product or services offerings, achieve economies of scale, or reduce
    competition. They may also wish to gain access to new customers or
    markets, including overseas.

    Example:

    ​Vodafone-Idea

    Vodafone and Idea were two


    telecommunications giants in India. Both the
    companies had a nominal market share with
    some pricing power over the customers.
    However, with the entry of Reliance Jio, all
    the telecom companies took a significant hit. Jio launched offers that were
    too attractive for the customers to avoid and gradually started to shift from
    them, which led to the merger of both the giants that is together now called
    as VI.

    2. Vertical Integration

    A company that undergoes vertical integration acquires a company that


    operates in the production process of the same industry. Some of the
    reasons why companies choose to integrate vertically include
    strengthening their supply chain, reducing production costs, capturing
    upstream or downstream profits, or accessing new distribution channels.
    To do this, one company acquires another that is either before or after it in
    the supply chain process.

    Example:

    Target

    Target, which has its own store brands and


    manufacturing plants. They, create, distribute and sell
    their products– eliminating the need for outside entities
    such as manufacturers, transportation, or other logistical
    necessities.

    3. Diversification

    A diversification strategy is the strategy that an organization adopts for the 


    development of its business. This strategy involves widening the scope of 
    the organization across different products and market sectors. The 
    strategy is to enter into a new market or industry which the organization is 
    not currently in, whilst also creating a new product for the new market.

    Example:

    HubSpot

    Inbound marketing giant HubSpot began as a


    software solution targeting small businesses
    with 1-10 employees who needed a more
    streamlined way to manage their content and
    customers. As their popularity and demand
    grew, Hubspot diversified its software to cater
    for enterprise-level needs. This saw it rise from $255,000 ARR in 2007 to a
    whopping $15.6 million in revenue by 2010. The company went public with
    its IPO in 2014, raising an impressive $125 million and cementing the
    company’s market value at around $880 million.

    4. Intensification

    Intensification involves expansion within the existing line of business. 


    Intensive g
    ​ rowth strategy​ involves safeguarding the present position and 
    expanding in the current product-market space to achieve growth targets. 
    Such an approach is very useful for enterprises that have not fully exploited 
    the opportunities existing in their current products-market domain. A firm 
    selecting an intensification strategy, concentrates on its primary line of 
    business and looks for ways to meet its growth objectives by increasing its 
    size of operations in its primary business. 
     
    Example:  
     
    McDonald’s  
     
    McDonald’s uses market penetration as its primary
    intensive strategy for growth. In applying this
    intensive strategy, McDonald’s grows by reaching
    more customers in markets where it already has
    operations. For example, McDonald’s opens new
    restaurants in North America and Europe by franchising, joint ventures or
    corporate ownership. 

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