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What are common corporate level growth strategies?

Published on April 30, 2023   7 min

A selection of talks on Management, Leadership & Organisation

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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.

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