Management: Growth and Expansion

Growth & Expansion:

 

This refers to an increment in interest rate and market shares.

a)investment growth -increase in the assets or

i)Organic growth

ii)Merger /acquisition

 

iii)Floating Equity share(IPO)

iv)Borrowing – Bank financial institutions

v)Factoring

vi)Hire purchase

vii)Leasing

b)Market share growth:-the percentage proportion of the industry controlled by a particular firm in relation to competition on the basis of sale turnover.

Market leader       Market challenge   Follower   Nicher

40%                         30%                     20%           10%

N/B there is direct linear relationship between market share and profit .the higher the market share the higher the profitability .therefore most companies would like to increase their market share.

Strategies for increasing Market shares .

i)Reduce the prices

ii)Improve product quality

iii)Increase advertising/sales promotions

iv)Improve customer care

 

 

 

Conceptual Approach

Market penetration strategies Product development strategies
Market development strategy Diversification strategy

 

Market penetration strategy .

A strategy of increased market share in which a company sells a new product in an existing market .this can be achieved through:-

a)product repackaging

b)product re-branding

c)product re-designing

d)product improvement/modification

e)Product innovation

Diversification strategy

a strategy of expanding market share in which a company sells new product to new market.

This strategy is also used by international co-operations by entering foreign market .

This can be achieved by

i)Exploiting

ii)Licensing & franchising

iii)Joint ventures

iv)strategic partnership alliance

v)management contracts

vi)merger & acquisition

vii)contract manufacturing/outsourcing

viii)Integrated strategies

ix)Direct foreign investments

The Integration strategy

A strategy used by large organizations to make arrangement and acquisitions or control other company’s in order to reduce cost of raw materials,enhance market asses,spread risks & reduce product or services value in market to achieve economic of scale. The more you produce the lower the cost per unit .

Types of Interrogations

a)Vertical integration: is a type of integration in which a firm integrates within the levels of industry(diff)

b)Horizontal integration:is integration in which a firm integrates within same level horizontally

  1. c) vertical integration .

 

Management Tutorial Africa

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.