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Chapter 13 Strategies for Growth and Managing the Implication of Growth

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1

Chapter

13

Strategies For Growth And Managing The Implications Of Growth

2

Growth StrategiesPenetrationProduct Development

Existing

MarketNew

Market Diversification DevelopmentExisting New

Product

3

StrategiesPenetration- Growth By Selling More Of Existing Product To Existing Customers Market DevelopmentNew Geographic Market New Demographic Market New Product Use

Product Development- Sell New Products To Existing Customers Diversification- Sell New Product To New Market4

Product IntegrationBackward Integration

Raw Materials Producer Raw Materials Wholesaler

Horizontal Integration

Manufacturer Finished Goods Wholesaler

Horizontal Integration

RetailerCustomerForward Integration5

Pressures On Firm Growth1. Existing Financial Resources

2. Human Resources 3. Management Of Employees 4. Entrepreneurs Time6

Overcoming Financial Resources Pressure Manage Cash FlowBudget vs. Actual Manage Inventory Manage Fixed Assets Manage Costs/Profits- Compare Actual vs. Standard Percentages Taxes Record Keeping7

Inventory ValuationFIFO- First Items In Inventory = First Sold LIFO- Last Items In Inventory = First Sold Convert To LIFO When:Anticipate Increased Labor, Materials, Production Costs Business/Inventory Growing Computer-Assisted Inventory Control Business Is Profitable8

Overcoming Human Resources PressuresPrepare Job Descriptions Itemize Specifications Outsource HR Responsibilities Recruiting Hiring Establish Benefit Programs Payroll Firing Permanent vs. Part-Time Corporate Culture9

Overcoming Employee Management PressureParticipative Management Establish Team Spirit CommunicateOpen & Frequent Provide Feedback Delegate Continuous Training10

Overcoming Entrepreneurs Time Management PressureEfficient Use of Time is Critical at Start-up and Growth Increase Productivity Increase Job Satisfaction Improve Interpersonal Relationships Reduce Time Anxiety/Tension Better Health11

Time Management Principles1.2. 3. 4.

5.

6.

Desire- Willpower To Optimize Time; Recognise oneself as a time-waster. Effectiveness- Focus On Important Issues Analysis- Determine How Time is currently spent and Where Time Is Being Wasted Teamwork- Small Amount Of Time Can Be Controlled Prioritize- Deal With Most Important Tasks First, Plan Ahead and Focus on the Key Issues Reanalysis- Review Process, Delegate12

Growth CategoriesUnused Potential Actual Growth

High

Professional ManagementLow

Little PotentialNo

Constrained

Yes Growth Aspirations

13


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