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Strategies For Growth & Strategies For Growth & Managing The Implications Managing The Implications

Of GrowthOf GrowthBook by Shepherd Hisrich,PetersBook by Shepherd Hisrich,Peters

Chap # 13Chap # 13

Presented To: Sir Ghulam Abbas

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Roll # 07-08Roll # 07-08

BSIT 7thBSIT 7th

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A Successful new entry provides the A Successful new entry provides the opportunity for Entrepreneur to grow his opportunity for Entrepreneur to grow his business.business.

Opportunities for new entry are generated Opportunities for new entry are generated by the knowledge of entrepreneur and by the knowledge of entrepreneur and from organizational knowledge.from organizational knowledge.

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Product development Product development StrategiesStrategies

Market development Market development Strategies Strategies

Diversification Diversification StrategiesStrategies

Penetration Strategies

Product

Market

Existing

New

Existing New

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A Strategy to grow by encouraging existing A Strategy to grow by encouraging existing customers to buy more of the firms current customers to buy more of the firms current product.product.

Focus on the firms existing product in its existing Focus on the firms existing product in its existing market.market.

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Strategy to grow by selling the firms Strategy to grow by selling the firms existing products to new group of existing products to new group of customers.customers.

Group of customers can be categorized in Group of customers can be categorized in term of Geographic's or demographics or term of Geographic's or demographics or new product use.new product use.

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Selling the existing product in new location.Selling the existing product in new location.

New Demographic MarketNew Demographic MarketBased upon income, education, age, sex,where they Based upon income, education, age, sex,where they

live.live.

New Product UseNew Product UseAn entrepreneurial firm find out that people use its An entrepreneurial firm find out that people use its

product in a way that was not expected product in a way that was not expected

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A strategy to grow by developing and A strategy to grow by developing and selling new products to people who are selling new products to people who are already purchasing the firms existing already purchasing the firms existing product.product.

Experience with a particular group is a Experience with a particular group is a source of knowledge.source of knowledge.

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A strategy to grow by selling a new A strategy to grow by selling a new product to a new market.product to a new market.

There are three types of diversification There are three types of diversification

1.1.Backward IntegrationBackward Integration

2.2.Forward IntegrationForward Integration

3.3.Horizontal IntegrationHorizontal Integration

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Backward integrationBackward integration

Raw materialProducer

Raw material Wholesaler

Manufacturer

Finished goods wholesaler

Customer

Forward Integration

Horizontal

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As the firm grow ,it changes.As the firm grow ,it changes.These changes introduces a number of These changes introduces a number of

managerial challenges.managerial challenges.

1.1.Pressure on existing financial resourcesPressure on existing financial resources

2.2.Pressure on Human ResourcePressure on Human Resource

3.3.Pressure on Management of EmployeePressure on Management of Employee

4.4.Pressure on Entrepreneurs TimePressure on Entrepreneurs Time

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Tayyaba JahangirTayyaba Jahangir

Bsit-07-33Bsit-07-33

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Financial ControlFinancial Control

Appropriate controls to ensure that Appropriate controls to ensure that entrepreneur met projections and goals.entrepreneur met projections and goals.

Managing cash flowManaging cash flow Managing inventoryManaging inventory1.1. LIFOLIFO

2.2. FIFOFIFO

Managing fixed assetsManaging fixed assets Managing costs and profitsManaging costs and profits1.1. Taxes 2. Record keepingTaxes 2. Record keeping

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Managing cash flowManaging cash flow Up-to-date Up-to-date

assessment of assessment of cash position.cash position.

Prepare monthly cash flow statements

Comparing budgetedOr Performa with

Actual results

This indicatesCash flow problems

Controlling the cash needs

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Managing inventoryManaging inventory

inventory

To much inventoryDrain on cash flow• Manufacturing• Transportation• Storage

1. Customer demand are not meet2. Lost in sales

To little inventory

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LIFO or FIFOLIFO or FIFO

Conversion to LIFO is beneficial when…Conversion to LIFO is beneficial when… Rising labor, materials, and other production Rising labor, materials, and other production

costs are anticipated.costs are anticipated. Business and inventory are growing.Business and inventory are growing. Business has computer-assisted inventory control Business has computer-assisted inventory control

method capability.method capability. Profitable business.Profitable business.

If the start up is losing money, there is If the start up is losing money, there is no no point in conversion methods.no no point in conversion methods.

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Managing fixed assetsManaging fixed assets

Involves long-term commitment and large Involves long-term commitment and large investments for new venture.investments for new venture.

Equipment require servicing and Equipment require servicing and insurance.insurance.

Affects utility costs.Affects utility costs. Equipment will be depreciated over time.Equipment will be depreciated over time.Leasing could consider as alternative.Leasing could consider as alternative. Terms of leaseTerms of lease Type of asset to be leasedType of asset to be leased Usage demand on the asset.Usage demand on the asset.

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Managing costs and profitsManaging costs and profits

Finding the cause of problems effecting profits

Eliminating the problems to increaseprofits

Computing net income for interim periods During the year

Establishing the standards andComparing results

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TaxesTaxes Withhold federal and state taxes for his / her Withhold federal and state taxes for his / her

employees.employees.

If payments are late higher interest and penalties If payments are late higher interest and penalties are to be paid.are to be paid.

Record keepingRecord keeping Maintain and keeping the databases for…Maintain and keeping the databases for… Customer knowledge and interestCustomer knowledge and interest Sales new and existingSales new and existing

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Beenish JahangirBeenish Jahangir

Bsit-07-04Bsit-07-04

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OVERCOMING PRESSURES ON THE OVERCOMING PRESSURES ON THE MANAGEMENT OF EMPLOYEESMANAGEMENT OF EMPLOYEES

Participative Style Of ManagementParticipative Style Of Management

The entrepreneur/manager involves other in The entrepreneur/manager involves other in decision making processdecision making process

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Activities to successfully grow a Activities to successfully grow a BusinessBusiness

Establish a team spirit Establish a team spirit Communicate with employeesCommunicate with employees Provide feedbackProvide feedback Delegate some responsibility to othersDelegate some responsibility to others Provide continuous training for employeesProvide continuous training for employees

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OVERCOMING PRESSURES ON OVERCOMING PRESSURES ON ENTREPRENEUR’S TIMEENTREPRENEUR’S TIME

Time managementTime management

The process of improving an individual’s The process of improving an individual’s productivity through more efficient use of productivity through more efficient use of time.time.

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Benefits Of Time ManagementBenefits Of Time Management

Increased productivityIncreased productivity Increased jo satisfactionIncreased jo satisfaction Improved interpersonal relationshipsImproved interpersonal relationships Reduced time anxiety & tensionReduced time anxiety & tension Better healthBetter health

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BASIC PRINCPLES OF TIME BASIC PRINCPLES OF TIME MANAGEMENTMANAGEMENT

Principle Of DesirePrinciple Of Desire

A recognition of the need to change A recognition of the need to change personal attitudes & habits regarding the personal attitudes & habits regarding the allocation of time.allocation of time.

Principle Of EffectivenessPrinciple Of Effectiveness

A focus on the most important issues, even A focus on the most important issues, even when under pressure.when under pressure.

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Principle Of AnalysisPrinciple Of Analysis

Understanding how time is currently being Understanding how time is currently being allocated, and where it is being allocated, and where it is being inefficiently invested.inefficiently invested.

Principle Of TeamworkPrinciple Of Teamwork

Acknowledgment that only a smallamount of Acknowledgment that only a smallamount of time is actually under one’s control & that time is actually under one’s control & that most of one’s time is taken up by others.most of one’s time is taken up by others.

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Principle Of Prioritized PlanningPrinciple Of Prioritized Planning

Categorization of tasks by their degree of Categorization of tasks by their degree of importance & then the allocation of time importance & then the allocation of time to tasks based on this categorization. to tasks based on this categorization.

Principle Of ReanalysisPrinciple Of Reanalysis

Periodic review of one’s time management Periodic review of one’s time management process.process.

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CATEGORIZATION OF CATEGORIZATION OF ENTREPRENEURS & THEIR FIRM’S ENTREPRENEURS & THEIR FIRM’S GROWTHGROWTH

Four Types Of Entreprenuers & Firm GrowthFour Types Of Entreprenuers & Firm Growth

Unused potential Actual growth

Little Potential Constrained

No Yes

High

Low

Entrepreneur’s growth aspiration

Entrepreneur’s ability to institute professional management practices

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