kyle hersey, stefan dimitrov, kasey darling, lauren d’amato & khaleel jhungeer
TRANSCRIPT
![Page 1: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/1.jpg)
GROWTH AND DIVERSIFICATION
STRATEGIESKyle Hersey, Stefan Dimitrov, Kasey Darling,
Lauren D’Amato & Khaleel Jhungeer
![Page 2: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/2.jpg)
Growth
Growth strategies are used to increase and expand a company’s operations
Growth is often necessary for the long-term survival of thriving companies
![Page 3: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/3.jpg)
Strategies
Concentration
Diversification
Vertical Integration
![Page 4: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/4.jpg)
Concentration
Involves growth by expanding existing businesses
Focuses efforts towards a single market
![Page 5: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/5.jpg)
Concentrated Companies McDonalds, Wal-Mart and Starbucks
All growing by concentrating on their primary business areas and domestic expansion
![Page 6: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/6.jpg)
Example
McDonald’s locations by country
![Page 7: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/7.jpg)
Advantages
Reduces resources needed to increase market share
Low risk in growing markets Allows companies to specialize in
specific markets Less change and easier decision
making
![Page 8: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/8.jpg)
Disadvantages
Limited domestic growth
Can be high risk as you are putting all your eggs in one basket
Very dependant on domestic economy
![Page 9: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/9.jpg)
Diversification
Involves adding products, services, locations, customers, and markets to your company’s portfolio
Allows companies to reach new audiences
![Page 10: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/10.jpg)
Types of Diversification
Concentric – new venture strategically related to existing business
Conglomerate – new venture that has no strategic fit or relationship with existing business
![Page 11: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/11.jpg)
Concentric Diversification Coca-Cola’s acquisition of Minute Maid
![Page 12: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/12.jpg)
Conglomerate Diversification Nestlé’s acquisition of Georgio Armani
![Page 13: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/13.jpg)
Advantages
Control of inputs leading to continuity Provides better risk control Provides movement away from declining
activities Take advantage of existing expertise Reach new markets
![Page 14: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/14.jpg)
Disadvantages
May result in slowed growth in its core business
Adding management costs Losses may be incurred during market
consolidation Cross-nation diversification may be met
with varying, political and legal, requirements.
![Page 15: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/15.jpg)
Vertical Integration
Form of diversification
Involves growth by acquiring companies up or down the supply chain
Backwards, Forwards or Balanced
![Page 16: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/16.jpg)
Backwards Vertical Integration
Acquiring suppliers
Tire Company Glass Company Metal Company
![Page 17: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/17.jpg)
Forward Vertical Integration
Acquiring distributors
Bottler
Coke Machines
![Page 18: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/18.jpg)
Balanced Vertical Integration
Acquiring distributors & suppliers
Design Production
Retail Stores
DistributionAdvertising
![Page 19: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/19.jpg)
Advantages
Lower transactional costs
Synchronization of Supply & Demand
Quality assurance
Strategic Independence
![Page 20: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/20.jpg)
Disadvantages
Higher coordination costs
Monopolization of markets
Higher costs when switching suppliers/ buyers
![Page 21: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/21.jpg)
Lets Review
![Page 22: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/22.jpg)
Concentration
Growth by focusing on expanding a primary business in a single market
Can involve international expansion but mostly concentrated on domestic
![Page 23: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/23.jpg)
Diversity
Growth by expanding the markets, products, locations or services a company offers
Concentric: acquiring related companies
Conglomerate: acquiring unrelated companies
![Page 24: Kyle Hersey, Stefan Dimitrov, Kasey Darling, Lauren D’Amato & Khaleel Jhungeer](https://reader034.vdocuments.net/reader034/viewer/2022050719/56649dcd5503460f94ac14f0/html5/thumbnails/24.jpg)
Vertical Integration
Growth by acquiring companies backwards or forwards in the supply chain
Forwards: acquire distributors
Backwards: acquire suppliers