Sunteți pe pagina 1din 12

Globalisation Strategy and Localisation

Learning Outcome
Understand the concepts of organic and inorganic growth Deliberate on the trends in organic and inorganic growth in recent past Discuss how some companies have successful used sustainable business strategies to pursue growth

Top-line vs Bottom Line Growth


It is extremely essential for companies to maintain profitable growth to increase or maintain shareholder value To achieve this, a company must grow its top line (i.e.. revenue) and also grow its bottom line A company can grow its top line by buying other companies. A company can also grow by increasing its sales on its own without buying other companies This is called organic growth. Growing revenue by acquiring other companies is sometimes called inorganic growth Organic growth can be achieved by increasing the sales of existing products and developing new products for both existing and new customers Inorganic growth is achieved by adding the revenue of the acquired companies Companies usually employ a combination of organic and inorganic growth to achieve their top line growth target

Growth Strategies for Companies


Growth Strategy Organic Inorganic

Asset Replication New Market New Technology New Customers Horizontal

Takeover/ Acquisition Joint Venture Strategic Alliance

Merger
Vertical Conglomerate

Terms And their Examples


Takeover/ Acquisition Joint Venture Strategic Alliance Takeover/ Acquisition Merger Joint Venture Strategic Alliance Merger Horizontal Vertical Conglomerate Sony - Ericsson Microsoft and Nokia Tata - Corus

Glaxo and Smithkline

Choosing Between Organic and Inorganic Strategies


Organic Inorganic

Developing new products and customers can also be long and costly A safer option as growth is closely controlled by the company

Acquisitions can be a costly proposition, often leading to high debt It may take a long time to integrate the acquired companies into existing operations Much faster way of growing business

The Agony and Ecstasy of Growth Strategies


Business acumen is critical in helping to weigh the advantages and disadvantages of each approach. Here are some questions that must be considered in deciding which approach to use: Acquisitions of big companies can be costly and it may take a long time to integrate the acquired companies into existing operations. HR practices, IT systems, and corporate culture are key factors that must be taken into account. But acquisitions lead to immediate increases in revenue Organic growth avoids problems of integration and overpaying, but developing new products and customers can also be long and costly. This will delay the increase in revenue as well as profit. Cisco, a leading provider of communications equipment and services, is a perfect example of a company that uses acquisitions as the mainstay of its growth strategy. Over the years, it has acquired numerous companies, both large and small An example of failed acquisitions in recent years is Daimler-Benzs purchase of Chrysler

Good To Read.

The New M&A Playbook Even though organizations spend trillions on mergers and acquisitions each year, the failure rate is between 70% and 90%. Authors Clayton M. Christensen, Richard Alton, argue that the chance for success with a M&A strategy can be improved if target selection, how much to pay for the target, and target integration are better understood They discuss the reasons for mergers and acquisitions as well as how to realize the benefits of each strategy

Tata Group Case Study Learning Outcome


Examine Tata Group's organic growth strategies. Understand how inorganic growth strategies played a crucial role in the success of Tata Group Analyze the issues and challenges faced by Tata Group while implementing organic and inorganic growth strategies

A Range of Recent Books Talk about how Sustainable Businesses are Adding Value for both the Society and their Shareholders

Situation

But what exactly is Sustainability? And what are Sustainable Enterprises?

Sustainability is broadly defined as meeting the needs of the present generation without compromising the ability of future generations to meet their own needs
Situation

According to a research conducted by the University of Michigan in 2002, Sustainable enterprises formulate new ways to create and capture environmental, social and financial value There are plenty of examples of entrepreneurs that have demonstrated that sustainability reveals opportunities to improve our natural environment, peoples quality of life, while at the same time creating economic value

S-ar putea să vă placă și