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Three Strategies For Managing Fast Growth

Three Strategies For Managing Fast Growth. Week 9 Fall, 2005 Prof. Dowling. Three Strategies For Managing Fast Growth. George von Krogh and Michael A. Cusumano. Three Strategies For Managing Fast Growth. Growing strategically Good growth plan

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Three Strategies For Managing Fast Growth

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  1. Three Strategies ForManaging Fast Growth Week 9 Fall, 2005 Prof. Dowling

  2. Three Strategies ForManaging Fast Growth • George von Krogh and • Michael A. Cusumano

  3. Three Strategies ForManaging Fast Growth • Growing strategically • Good growth plan • Product and market combinations company will pursue • Size the company hopes to achieve • Know-how and organizational structures that will support expansion

  4. Three Strategies ForManaging Fast Growth • Fast-growing companies • Growth achieved by: • Scaling • Duplication • Granulation

  5. Three Strategies ForManaging Fast Growth • Scaling: Doing more of what you’re good at • Invest aggressively • Specialize and standardize • Hire the right mix • Adapt the structures • Find ways to learn from customers early

  6. Three Strategies ForManaging Fast Growth • Is scaling the right strategy? • It works best when: • The market is potentially large enough for rapid growth in a focused product line • The product creates unique value in the customers’ view • The company can distribute products widely at low cost

  7. Three Strategies ForManaging Fast Growth • Duplication: Repeat the business model in new regions • Balance standardization and adaptation • Hire flexible, independent managers • Duplicate key parts of the infrastructure • Duplicate entrepreneurial knowledge • Be aware of the limitations

  8. Three Strategies ForManaging Fast Growth • Is duplication the right strategy? • It works best when: • The business requires physical presence and the company can repeat its business model in new geographic markets • There is a need for better distribution • The company can adapt its experience in product development, manufacturing and marketing approaches fairly easily

  9. Three Strategies ForManaging Fast Growth • Granulation: Growing select business cells • Balance the old and the new • Balance the informal and formal • Evaluate and monitor • Learn from customers, partners and competitors

  10. Three Strategies ForManaging Fast Growth • Is granulation the right strategy? • It works best when: • Growth through scaling and duplicating has clear limits • A new technology is flourishing that could become a new substitute for the company’s products or a new business opportunity. • The company is mature enough to monitor new business activities, share knowledge internally and learn effectively about new markets and competitive scenarios.

  11. Three Strategies ForManaging Fast Growth • Combining strategies • For most early-stage companies, it is best if managers implement the three growth strategies sequentially, with some overlapping.

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