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Chapter

13

Strategies For Growth And Managing The Implications Of Growth

Growth Strategies
Penetration
Product Development

Existing

Market
New

Market Diversification Development

Existing New

Product

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
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Product Integration
Backward Integration

Raw Materials Producer Raw Materials Wholesaler

Horizontal Integration

Manufacturer Finished Goods Wholesaler

Horizontal Integration

Retailer
Customer
Forward Integration
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Pressures On Firm Growth

1. Existing Financial Resources

2. Human Resources 3. Management Of Employees 4. Entrepreneurs Time

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Overcoming Financial Resources Pressure

Manage Cash FlowBudget vs. Actual Manage Inventory Manage Fixed Assets Manage Costs/Profits- Compare Actual vs. Standard Percentages Taxes Record Keeping
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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
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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
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Overcoming Employee Management Pressure

Participative Management Establish Team Spirit CommunicateOpen & Frequent Provide Feedback Delegate Continuous Training
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Overcoming Entrepreneurs Time Management Pressure

Efficient Use of Time is Critical at Start-up and Growth Increase Productivity Increase Job Satisfaction Improve Interpersonal Relationships Reduce Time Anxiety/Tension Better Health
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Time Management Principles

1.
2. 3. 4.

5.

6.

Desire- Willpower To Optimize Time; Recognise oneself as a time-waster. Effectiveness- Focus On Important Issues Analysis- Determine How Time is currently spent and Where Time Is Being Wasted Teamwork- Small Amount Of Time Can Be Controlled Prioritize- Deal With Most Important Tasks First, Plan Ahead and Focus on the Key Issues Reanalysis- Review Process, Delegate
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Growth Categories
Unused Potential Actual Growth

High

Professional Management
Low

Little Potential
No

Constrained

Yes Growth Aspirations

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