When the strategy of concentrated growth is used

The development of multi-industry in largeand medium-sized companies led, in due time, to the need to develop some benchmark strategies in doing business that characterize the most optimal directions of the company's growth. If we consider the classification of these strategies, we can conditionally distinguish three areas:

  1. The so-called strategy of conceptual growth,which is an element of sustainable strategies, and does not imply in its essence any drastically dramatic changes, both in the field of development and in the field of quantitative growth of the firm.
  2. Strategies for growth of internal and external (strategygrowth integrated), aimed at both horizontal and vertical growth. At the same time, external and internal resources of the organization itself can be used.
  3. Growth strategies diversified. In its essence, this is the spread of the activity of a particular firm 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 productions. This growth strategy is inherent, in the first place, for fast-growing companies.

Basic growth strategies, in the first placefirm, orient firms to concentrate their efforts on the already existing types of business vision with their further gradual development and strengthening. As a rule, large companies are resorting to such strategies, which managed to form dominant positions in their market segment for a certain moment and try to minimize the influence of controlling state bodies, including antimonopoly ones, on their activities. On the other hand, the strategy of concentrated growth can be applied by those firms that have a sufficient stable income and do not see the prospects for throwing finance into a sharp development, both vertically and horizontally.

In a more narrow understanding, strategyconcentrated growth implies the activation of the activity of a particular firm purely on one type of activity. This kind of solution has in its essence two sides of the coin. First, narrow specialization always has an advantage due to the improvement of technologies, skills and, as a result, the correlation of price and quality. On the other hand, such a company is a priori less resistant to market fluctuations, primarily on the demand of the offered products or services. In addition, companies that have this growth strategy inherent are vulnerable to attacks from aggressive competitors and can be pushed out of the market, as they do not have sufficient maneuverability in choosing a common strategic course.

The strategy of concentrated growth can beis represented by the so-called internal (qualitative) growth strategy. The essence of it is to update existing products or services, as well as the development of new ones, but from the same line. It is used in efficiently operating enterprises that generate profit, but have a certain potential for development. This kind of strategy of concentrated growth has as its goal more significant penetration of the market for a particular product or service by increasing the quantity, and taking into account the modernization, and the quality of the products. 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 with the help of marketing tools.

Whatever the basic growth strategies chosenfirms, the main thing is that they had, both theoretical and practical justification, allowed to solve the tasks assigned to the organization and strengthened positions in the market.