Name:Ishita Shah

Rollno:532

Growth and Survival

Strategies

MEANING
Business growth means an increase in the size or
scale of operations of a firm usually
accompanied by increase in its resources and
output

Growth stratigies classified as:

Vertical growth: Occurs when One function
previously carried over by a supplier is being
taken over to reduce cost .it results in vertical
integration
Horizontal growth: Firm that produces the same
type product with same process
i. Vertical integration
ii. Backward integration
iii. Forward integration

Deciding to grow and planning for growth

Scarcity of funds
Risk
Technology
Marketing

Need for growth of business organisation

Survival
Economies of scale
Owners mandate
Expansion of the market
Latest technology
Prestige and power
Government policy
Self-sufficiency

Factors affecting growth of organisation

Demand and supply

Money and banking
Economic growth and development
Income and employment
General price level
Trade cycles

Advantages

Obtaining the economies of scale

Exploitation of business opportunities
Facing competition
Protection againt adverse business conditions
Gaining economic and market power
Raising profits
Making optium utilization of resources

Limtations

Finance
Market
Human relations problem
Managemet
Lack of knowledge
Social problems

Different growth strategies

1. Intensive growth strategy: Invloves raising
market share sales revenue and profit of the
present product or services and slowly increses
it is called internal growth startegy
. Advantages :
.Growth is slow so can be handled easily
.Capital required for expansion can be taken
from the firmss own fund
.Existing resources can be utilised

Limitations
Growth is very slow and it takes along time
Practical problems of intensive growth startegy
Business firm loses te possiblity of exploiting
many business opportunities

2. Diversification
. Advantages :
. Better use of resources
. Reduce the decline in sales
. More competive with greater resources
. Minimize risk

 Limitations :
Huge funds are required
Diversificaton may lead to unknown
Types of diversification:
Horizontal integration
Vertical inegration
Concentric

3. Modernization : inlvolves up gradation pf

technology to increase production,to imrove
quality and to reduce wastage and cost
. Advantages
. It improves the productivity and efficiency of
the firm
. It makes available better quality products to
customers
. Firm becomes more competitive in the long run

 Limitations
The accumulated savings of the business may
not be sufficient to finance
Existingstaff may face problems in adapting the
new technology

4. External growth strategies :merger is an

external growth strategy. Merger can occur in
two ways:
. Acquistion and takeover
. Amalgmation

Survival strategies
Spin-off:
A business unit as a separate business through a
distribution of stock or cash deal
Allows a new management team to try to do
better with business unit is a poor or mediocre
performer
Liquidation is the best option

Divestment
An organisation divests when it sells a business
unit to another fir that will continue to operate it
In india the TATA group has in some form or the
other,been realiging its portfolio since the early
1990s
But few years it had done this in a mor stratured
manner

Liquidation
Liquidation is the final resort for a declining
company
This is the utimate stage in the process of
renewing company

THANK YOU