14-1

14
Chapter

Strategies For Growth And

Managing The Implications
Of Growth

14-2
 Growth Strategies

Existing Product
Penetration Development
Market

New Market
Development Diversification

Existing New
Product 14-3
 Strategies
Penetration- Growth By Selling More Of
Existing Product To Existing Customers
Market Development
New Geographic Market
New Demographic Market
New Product Use
Product Development- Sell New Products
To Existing Customers
Diversification- Sell New Product To New
Market 14-4
 Product Integration
Backward Raw Materials Producer
Integration

Raw Materials Wholesaler

Horizontal Horizontal
Integration Manufacturer Integration

Finished Goods Wholesaler

Retailer
Forward
Customer Integration
14-5
 Pressures On Firm Growth
1. Existing Financial Resources

2. Human Resources

3. Management Of Employees

4. Entrepreneur’s Time
14-6
 Overcoming
Financial Resources Pressure
• Manage Cash Flow- Budget vs.
Actual
• Manage Inventory
• Manage Fixed Assets
• Manage Costs/Profits- Compare
Actual vs. Standard Percentages
• Taxes
• Record Keeping
14-7
 Inventory Valuation
FIFO- 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 Profitable
14-8
 Overcoming
Human Resources Pressures
Prepare Job Descriptions
Itemize Specifications
Outsource HR Responsibilities
 Recruiting
 Hiring
 Establish Benefit Programs
 Payroll
 Firing
 Permanent vs. Part-Time
 Corporate Culture
14-9
 Overcoming
Employee Management Pressure
Participative Management
Establish Team Spirit
Communicate- Open & Frequent
Provide Feedback
Delegate
Continuous Training
14-10
 Overcoming Entrepreneur’s
Time Management Pressure
Increase Productivity
Increase Job Satisfaction
Improve Interpersonal
Relationships
Reduce Time
Anxiety/Tension
Better Health
14-11
Time Management Principles
1. Desire- Willpower To Optimize Time
2. Effectiveness- Focus On Important
Issues
3. Analysis- Determine Where Time Is
Being Wasted
4. Teamwork- Small Amount Of Time Can
Be Controlled
5. Prioritize- Deal With Most Important
Tasks First
6. Reanalysis- Review Process, Delegate
14-12
 Growth Categories

Unused
High
Potential Actual Growth
Professional
Management
Little
Low
Potential Constrained

No Growth Yes
Aspirations 14-13