Growth Strategy

Growth strategy means making plan for increasing organization’s scale of operations. It makes a strategy to grow in sales, profits, markets, etc. It defines the actions that firms should take to decide the magnitude, nature and rate of growth.

Importance of Growth Strategy

Growth strategy serves the following purposes:n

1. It allows firms to grow in a scientific, rational and phases manner. Firms follow specific guidelines to pursue their objective.

2. It helps in effective implementation of growth project.

3. It helps in exploiting environmental opportunities and matches them with firms’ internal strengths and weaknesses.

4. It helps firms in forecasting change and adjusts their structure accordingly.

Growth strategy is important for firms operating in competitive environment. It helps in setting high targets of performance to be achieved within the resource constraints.

Types of Growth Strategies

Growth strategies are of the following types:

       1. Intensive Growth Strategy
       2. Diversification
            Horizontal Diversification
                    Concentric Diversification
                    Conglomerate Diversification
             Vertical Diversification
                     Backward Integration
                      Forward Integration
        3. External Growth Strategy
                      Mergers and Acquisitions
                      Joint Ventures

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