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0:00
I'm Jeremy Short, the
G. Brint Ryan Chair in
Entrepreneurship
and Professor of
Management at the
University of North Texas.
I'm here to talk about what are
common corporate-level
growth strategies.
0:13
One of the key areas studied
in strategic management ties to
understanding the
various different
growth strategies used by firms.
In some cases, the
strategies are
relevant for firms in
a single industry,
and in others, they are tied to
businesses that
compete and multiple,
often very different industries.
I'd like to walk you through
a number of growth strategies as
well as important considerations
tied to these strategies.
0:38
Concentration
strategies refer to
strategies that are focused
on a single industry.
There are three common
concentration strategies.
First, in the case of
market penetration,
this occurs when firms push
to further gain market share.
You may have heard
of the cola wars or
beer wars as examples of this
kind of strategic battle.
Second, market
development refers to
firms trying to push
products into new markets.
Starbucks is great at taking
a coffee shop concept and then
introducing many new items
ranging from baked goods to
breakfast and lunch sandwiches
to various merchandise
over the years.
Finally, product
development occurs
when firms continually innovate.
Gillette's basic razor design
has been similar for decades,
but the introduction of multiple
blades, sharper razors,
and other innovations
exemplifies
a product development strategy.
1:29
Moving beyond strategies that
focus on a single industry,
they're also corporate-level
strategies known as
diversification strategies
that involve steps to
acquire similar products as
well as corporate-level
strategies
to get a firm closer to
either the customers
or suppliers.
Horizontal integration refers to
a type of diversification where
a corporation might acquire
a similar brand or even
competitor to gain market share.
Starbucks acquisition of
Seattle's Best Coffee in
the early 2000s is an example
of this horizontal integration.
In some cases, both the
original and acquired
firm continue to exist
and in some cases,
the acquired firm is eventually
integrated into the parent firm.
When one firm is much
larger than the other,
this tends to be called an
acquisition and when both
firms are similar in size,
this tends to be
referred to as a merger.
