What are the growth strategies in a business?

(a) Integration
Integration may take two forms: vertical and horizontal integration.
Vertical integration strategy involves growth through acquisition of other organizations in a channel of distribution. When an organization purchases other companies that supply it, it engages in backward integration. The organization that purchases other firms that are closer to the end users of the product (such as wholesalers and retailers) engages in forward integration.
Vertical integration is used to obtain greater control over a line of business and to increase profits through greater efficiency or better selling efforts.
Horizontal integration involves growth through the acquisition of competing firms in the same line of business. It is adopted in an effort to increase the size, sales, profits, and potential market share of an organization.

(b) Diversification
This strategy involves growth through the acquisition of firms in other industries or lines of business
Diversification may be of different types:
(i) Related or concentric diversification. When the acquired firm has production technology, products, channels of distribution, and /or markets similar to those of the firm purchasing it, the strategy is called concentric diversification.. This strategy is useful when the organization can acquire greater efficiency or market impact through the use of shared resources. A case of related or concentric diversification is the tie-up of McDonald with Coco-cola.

(ii) Unrelated or conglomerate diversification. When the acquired firm is in a completely different line of business, the strategy is called unrelated or conglomerate diversification.

(c) Joint ventures.
In a joint venture, an organization works with another company on a project too large to handle by itself, such as some elements of the space program. Similarly, organizations in different countries may work together to overcome trade barriers in the international market or to share resources more efficiently.

(d) Mergers and acquisitions.
In a merger, a company joins with another company to form a new organization.


(e) Concentration
The most common grand strategy is concentration on the current business.
A concentration strategy is one in which an organization focuses on a single line of business The firm directs its resources to the profitable growth of a single product, in a single market, and with a single technology.

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maurice.mutuku answered the question on April 16, 2019 at 13:16