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13 Cards in this Set
- Front
- Back
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Internal growth strategy definition |
effort taken within the firm such as: new product development product related strategies and international expansion |
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internal growth advantages/disadvantages |
advantages: step by step/ constant growth maximum control preserve culture encourage internal entrepreneurship promote from within Disadvantages: slow growth need to develop new resource difficult to recoup failed investment adds to industry capacity (too many competitors) |
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Internal types of growth new product development (5) |
creation& sale of new product to increase revenues keys: find niche add value get quality and pricing right focus on specific target market conduct feasibility analysis |
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internal type of growth, why new product fail ? (5) |
potential market overestimated product perceived too expensive poorly design undifferentiated from competitor's product cost of developing are too high |
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Internal growth: other product related strategies: (4) |
1)- Improving existing product: increase quality to increase revenues 2)- Market penetration: increase sales through marketing effort/ increase production capacity 3)-Extend product line: additional variations to attract customers 4)- Geographic expansion: others locations |
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Internal growth international expansion (6) ELJFTW |
derive competitive advantage by using their resources to sell product in multiples countries: 1)- Exporting (produce home, sell abroad) 2)-licensing (grant permission to another firm to manufacture product for royalties 3)-Joint ventures (establishment of a firm owned by 2+ independent firms 4)-Franchising: Agreement between franchisor and franchisee 5)- Turnkey project: company builds facility in another country, trains personnel and turns over the key to project when completed 6)- Wholly owned subsidiary: Manufacture in foreign country and establish a permanent presence |
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External Growth Strategies (5) |
Rely on establishing relationships with third parties, such as: mergers and acquisitions strategic alliances joint ventures licensing franchising |
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External growth advantages and disadvantages |
Advantages: Economie of scale reduce competition access to proprietary product access to new product & markets access to technical expertise diversification of business risk access to brand name Disadvantages: incompatibility of top management clash of corporate cultures operational problems Increase business complexity Loss of organizational flexibility Antitrust complication |
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External growth Merger and acquisitions |
expand product line Gain distribution channels economies of scale process: schedule meeting with target evaluate feeling of target determine how to finance negotiate make offer develop non-compete agreement hire attorney explain situation move foward |
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External growth Licensing |
Granting permission by one firm to another to use specific form of its intellectual property under conditions 1)- Technology licensing: 2)- Merchandise and character: licensing of recognize trademark or brand ex harley davidson give permission to other firm to put the name of their tee shirt.. |
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External growth strategic alliances |
partner between 2 firms to achieve specific goal, it is informal 1)- Technological alliance: share R&D, engineering, manufacturing 2)- Marketing alliances: match a company with excess distribution with a company that has product to sell |
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External growth Joint venture |
entity created by 2+ firms 1)- Scale joint venture: partners collaborate at a single point in value chain to gain economies of scale in production 2)- Link joint venture; positions of partners not symmetrical, and partners help each other access adjacent links in value chain |
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Advantages and disadvantages of strategic alliances and joint venture |
Advantages: gain access to specific resources Economie of scale Risk and cost sharing Learning Speed to market Neutralize competitions access to foreign markets Disadvantages: loss of proprietary information management complexities Financial/organization risks risk of being dependent loss in decision autonomy culture clash loss of organization flexibility |
