1. GOOD MORNING
WELLCOME TO
ALL………….

3. TOPIC:-
GROWTH /EXPANSATION
STRATEGY

4. GROWTH /EXPANSATION STRATEGY
MEANING:- The growth strategy is called as
expansion strategy .To achieve higher targets
than before ,a firm may enter into new
market, introduce new product lines, serve
additional market segments, and so on .
GROWTH /EXPANSATION STRATEGY

5. The growth strategy can be
further classified into :-
• Internal growth strategies
• External growth strategies

6. • INTENSIFICATION STRATEGY
• DIVERSIFICATION STRATEGY
• MODERNISATION STRATEGY
• SELF-FINANCING STRATEGY
• INTEGRATION STRATEGY
INTERNAL GROWTH STRATEGY

7. In the case of intensification strategy, the firm pursues growth
within the existing businesses. intensification strategy
involves three alternatives:-
1)MARKET PENETRATION STRATEGY:- In this case the firm continues
with its current products &current market but it tries to
increase its market share through aggressive marketing in the
areas of advertising sales promotion, price cuts , etc .
INTENSIFICATION STRATEGY

8. 2)MARKET DEVELOPMENT STRATEGY :-
The firm enters into new markets
apart from current markets by offering the existing range of product.
For this purpose the firm has to undertake market research right
pricing effective promotion-mix & appointment of goods dealer’s
network.
3)PRODUCT DEVELOPMENT STRATEGY:-
The firm may continue with the
existing market but introduces improved products & substitutes. It
may also enter in new market with the help of improved and new
products.

9. DIVERSIFICATION STRATEGY
MEANING:- Diversification is one type of internal
growth strategy. It involves entry into new
products& in new markets. Diversification can be
defined as entry of a firm into new product or
product line, new services or new markets , involving
substantially different skill, technology & knowledge.

10. TYPES OF DIVERSIFICATION STRATEGY
1)VERTICAL DIVERSIFICATION:- it consists of extending the activities of
a firm it can be in two forms :-
a) Backward integration :- In backward integration a company
moves one step backwards from the current line of business. For
instance, hero cycles has set up a subsidiary to manufacture cycle
wheels and tubes.
b) Forward integration:- In this case the company moves one step
ahead of its current line of business activities. For instance, a cloth
manufacturer may enter into readymade garments business. The
company may also diversify into distribution activities by opening
up its own retail shops like that of Bata or Raymond’s.

11. 2) Horizontal diversification:- when a company enters into a
new business which is closely related with the existing line of
business through processes , Technology or markets. for
instance, a gents readymade garment manufacturer may enter
in the business of ladies ready made garment .
3) Concentric diversification:- It involves diversification into
such areas or products which are indirectly related to its existing
line of business . concentric diversification the new business is
linked to existing businesses. For example, a car dealer may start
a finance company to finance hire purchase of cars.
4) conglomerate diversification:- It involves entry in a
totally new areas or business. It is an attempt to diversify
outside the present market or product. In conglomerate
diversification , no linkages exit between the new business and
the existing business. For instance, a firm may enter into several
types of business such as computer
software, banking, insurance, airline, etc.

12. MODERNISATION STRATEGY
MEANING:- Modernization strategy involves
up gradation of existing physical facilities like
plant and machinery and processes. The
modernization result into improvement in the
quality of products so that they offer better
value to the customers.

13. ADVENTAGES OF MODERNISATION
STRATEGY
The modernization strategy must be adopted by
Indian firms, as it offers several advantages:-
• Industrial productivity
• Full utilization of plant capacity
• Helps to face competition
• Enhances corporate image
• Increase in profit
• Higher efficiency
• Research & development
• Economy in production

14. SELF-FINANCING STRATEGY
MEANING:-Self-financing refer to ploughing back of profit
or accumulation of earning over a period of time. This
approach is followed by well established profit making
companies.
ploughing back of profit can be defined
as the process of setting aside a portion of profit earned
for the purpose of investing in fixed assets and/or to
meet working capital needs, if the need so arise.

15. MERITS OF PLOUGHING BACK OF
PROFIT:
A) To the company :
• Economical
• Less financial risk
• Repayment of debentures and
term loans
• Freedom to management
B) To the shareholder:
• Appreciation in share value
• Regular dividends
• Increase in collateral value of
shares
• Easy liquidity
C) To the society:
• Capital formation
• Development of industry
• Goods at reasonable prices
• Social welfare

16. INTEGRATION STRATEGY
MEANING:-Integration means combining activities related to the
present activity of business of a firm. There can be interlinking of
activities performed by a firm right from the procurement of basic
raw materials down to marketing of goods to the final consumer.
Integration is an expansion strategy as it involves widening of
business definition of a firm. It is also a subset of diversification
strategy as it involves undertaking certain activities or business,
which the firm was not dealing earlier.
The integration strategy can be of two types:-
1)Vertical integration :-backward integration & forward integration
2) Horizontal integration.

17. 1)VERTICAL INTEGRATION:- it consists of extending the
activities of a firm it can be in two forms :-
a) Backward integration :- In backward integration a company
moves one step backwards from the current line of business. For
instance, a firm may tie up with supplier of raw materials or take
over a firm that supplies raw materials and/or components, hero
cycles has set up a subsidiary to manufacture cycle wheels and
tubes.
b) Forward integration:- In this case the company moves one step
ahead of its current line of business activities. For instance, a cloth
manufacturer may enter into readymade garments business.
2) HORIZONTAL INTEGRATION:- when a company enters into
a new business which is closely related with the existing line of
business through processes , Technology or markets. for instance, a
gents readymade garment manufacturer may enter in the business
of ladies ready made garment .

18. THANK YOU
SPECIAL THANKS TO DEVSHREE MAM…....