economics today
LESSON–10
ALTERNATIVE GROWTH
STRATEGIES FOR SMALL
BUSINESS
Sonia Sabharwal
STRUCTURE
10.0
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
Introduction
Objectives
Meaning of Business growth
Need for growth
Advantages of growth
Limitations of growth
Forms of growth
10.6.1 Organic growth
10.6.2 Inorganic growth
Meaning of growth strategy
Types of growth strategies
10.8.1 Intensive Growth strategy
10.8.2 Diversification
10.8.3 Modernization
10.8.4 Merger
10.8.5 Joint Venture
Crisis in Business Growth
Summary
Glossary
Self Assessment Questions
Further Readings
10.0 INTRODUCTION
In earlier units we discussed the processes involved in the setting up of commercially viable and technically feasible small scale enterprises (SSE).
We also examined the processes of finding an ideal location and layout for a
SSE. In this lesson we will take a view of different alternatives available for the growth of a small scale enterprise.
Business growth is a natural process of adaptation and development that occurs under favorable conditions. The growth of a business firm is similar to that of a human being who passes through the stages of infancy, childhood, adulthood and maturity. Many business firms started small and have become big through continuous growth. However, business growth is not a
137
homogenous process. The rate and pattern of growth varies from firm to firm.
Some firms grow at a fast rate while others grow slowly. Also, not all enterprises survive to grow big. This may be due either to the nature of the firm or the entrepreneur. Some entrepreneurs do not want to grow their ventures, choosing instead to pursue other interest, spend more time with family or develop other business activities.
10.1 OBJECTIVES
After going through the lesson you should be able to:
• Explain the meaning and need for growth
• Discuss the benefits and limitations of growth
• Explain the meaning of
ALTERNATIVE GROWTH
STRATEGIES FOR SMALL
BUSINESS
Sonia Sabharwal
STRUCTURE
10.0
10.1
10.2
10.3
10.4
10.5
10.6
10.7
10.8
10.9
10.10
10.11
10.12
10.13
Introduction
Objectives
Meaning of Business growth
Need for growth
Advantages of growth
Limitations of growth
Forms of growth
10.6.1 Organic growth
10.6.2 Inorganic growth
Meaning of growth strategy
Types of growth strategies
10.8.1 Intensive Growth strategy
10.8.2 Diversification
10.8.3 Modernization
10.8.4 Merger
10.8.5 Joint Venture
Crisis in Business Growth
Summary
Glossary
Self Assessment Questions
Further Readings
10.0 INTRODUCTION
In earlier units we discussed the processes involved in the setting up of commercially viable and technically feasible small scale enterprises (SSE).
We also examined the processes of finding an ideal location and layout for a
SSE. In this lesson we will take a view of different alternatives available for the growth of a small scale enterprise.
Business growth is a natural process of adaptation and development that occurs under favorable conditions. The growth of a business firm is similar to that of a human being who passes through the stages of infancy, childhood, adulthood and maturity. Many business firms started small and have become big through continuous growth. However, business growth is not a
137
homogenous process. The rate and pattern of growth varies from firm to firm.
Some firms grow at a fast rate while others grow slowly. Also, not all enterprises survive to grow big. This may be due either to the nature of the firm or the entrepreneur. Some entrepreneurs do not want to grow their ventures, choosing instead to pursue other interest, spend more time with family or develop other business activities.
10.1 OBJECTIVES
After going through the lesson you should be able to:
• Explain the meaning and need for growth
• Discuss the benefits and limitations of growth
• Explain the meaning of