The development of diversification of production in large and medium-sized companies led, in due time, to the need to develop certain reference strategies in doing business that characterize the most optimal directions of enterprise growth. If we consider the classification of these strategies, then we can arbitrarily distinguish three areas:
- The so-called conceptual growth strategy, which is an element of sustainable strategies, and which does not imply in its essence any cardinally drastic changes, both in the field of development and in the field of quantitative growth of the company.
- Growth strategies of internal and external (integrated growth strategies), aimed at both horizontal and vertical growth. In this case, both external and internal resources of the organization itself can be involved.
- Diversified Growth Strategies. At its core, this is the extension of the activities of a particular company to markets where it has not yet been present, both in the field of production and in the field of services, as well as the introduction of new industries. Such a growth strategy is inherent, first of all, to rapidly developing companies.
Basic growth strategies , primarily sustainable ones, orient companies to concentrate their efforts on existing types of business vision with their further gradual development and strengthening. As a rule, rather large companies have resorted to such strategies, which were able to form at some point dominant positions in their market segment and try to minimize the influence of controlling state bodies, including antitrust, on their activities. On the other hand, a strategy of concentrated growth can be applied by those companies that have sufficient stable income and do not see the prospects of throwing finance into a sharp development, both vertically and horizontally.
In a narrower understanding, the strategy of concentrated growth implies the intensification of the activity of a particular company purely on one type of activity. This kind of decision has inherently two sides to the coin. Firstly, narrow specialization always has the advantage of improving technology, skills and, as a result, value for money. On the other hand, such a company is a priori less resistant to market fluctuations, primarily on the demand for offered products or services. In addition, companies that are inherent in this growth strategy are vulnerable to attacks by aggressive competitors and can be forced out of the market because they do not have sufficient maneuverability in choosing a common strategic course.
The strategy of concentrated growth can be represented by the so-called strategy of internal (quality) growth. Its essence lies in updating existing goods or services, as well as developing new ones, but from the same line. It is used in efficiently operating enterprises that generate profit, but have a certain development potential. This type of strategy of concentrated growth is aimed at more substantial penetration into the market of a particular product or service by increasing the quantity, and taking into account modernization, and product quality. It is worth noting that the internal growth strategy makes sense if the market is not yet fully saturated with this type of product or can be expanded using marketing tools.
Whatever the basic growth strategies of the company are chosen, the main thing is that they have both theoretical and practical justification, allow us to solve the tasks set for the organization and strengthen our market position.