Chapter 12 Three Strategies for Managing Fast GrowthImportant Factors for GrowthThree Stages for Managing fast GrowthScalingSlide 5Scaling works best when:DuplicationSlide 8Duplication works best when:Black-boxingLimitations of Scaling and DuplicationGranulationSlide 13Granulation works best when:Combination of StrategiesExamples of Companies using these strategiesAmazon.comMcDonalds3MFUN Group ActivityAnd the winner is……Chapter 12Three Strategies for Managing Fast GrowthChapter 12Three Strategies for Managing Fast GrowthYu-lun HuangMari-Beth OrtegaDaniel PaulYu-lun HuangMari-Beth OrtegaDaniel PaulImportant Factors for GrowthImportant Factors for Growth•Growth Plan captures the vision for expansion–Size it hopes to achieve–Addresses Product and Market combinations•Know-how and organizational structures that will support expansion•Growth Plan captures the vision for expansion–Size it hopes to achieve–Addresses Product and Market combinations•Know-how and organizational structures that will support expansionThree Stages for Managing fast GrowthThree Stages for Managing fast Growth•Growth is achieved by:–Scaling–Duplication–Granulation•Growth is achieved by:–Scaling–Duplication–GranulationScalingScalingScalingScaling•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•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 earlyScaling works best when:Scaling works best when:•The market is large enough for rapid growth•The product creates unique value•The company can distribute products at a low cost•The market is large enough for rapid growth•The product creates unique value•The company can distribute products at a low costDuplicationDuplicationDuplicationDuplication•Repeat the business model in new regions–Balance standardization and adaptation–Hire flexible, independent managers–Duplicate key parts of the infrastructure –Duplicate entrepreneurial knowledge•Repeat the business model in new regions–Balance standardization and adaptation–Hire flexible, independent managers–Duplicate key parts of the infrastructure –Duplicate entrepreneurial knowledgeDuplication works best when:Duplication works best when:•The business has a repeatable business model•There is need for better distribution•The company can adapt its experiences easily•The business has a repeatable business model•There is need for better distribution•The company can adapt its experiences easilyBlack-boxingBlack-boxing•Written manuals•Video presentations•Written manuals•Video presentationsLimitations of Scaling and DuplicationLimitations of Scaling and Duplication•Product line may run out of steam•Too many low-cost competitors•No foreign markets to conquer •Product line may run out of steam•Too many low-cost competitors•No foreign markets to conquerGranulationGranulationGranulationGranulation•Growing select business cells–Balance the old and new•Balance the informal and formal •Evaluate and monitor•Learn from others•Growing select business cells–Balance the old and new•Balance the informal and formal •Evaluate and monitor•Learn from othersGranulation works best when:Granulation works best when:•A new technology has become a substitute •The company has become mature and can:–Monitor new business activities–Share knowledge –Learn about new markets and competitive scenarios •A new technology has become a substitute •The company has become mature and can:–Monitor new business activities–Share knowledge –Learn about new markets and competitive scenariosCombination of StrategiesCombination of Strategies•Early stage Companies–Sequential implementations•Early stage Companies–Sequential implementations•Large diversified Companies–Simultaneous implementationExamples of Companies using these strategies Examples of Companies using these strategiesAmazon.comAmazon.com•Scaling–The market is very large and growing (eCommerce)–Distributes products widely at low costs–Product creates unique value•Easy to buy, return, track your purchase•Scaling–The market is very large and growing (eCommerce)–Distributes products widely at low costs–Product creates unique value•Easy to buy, return, track your purchaseMcDonaldsMcDonalds•Duplication–They have repeated their business model all over the world in 119 countries–Processes are easily adaptable•Products can be tailored to cultural preferences–Need for more distribution•Market might be saturated •Duplication–They have repeated their business model all over the world in 119 countries–Processes are easily adaptable•Products can be tailored to cultural preferences–Need for more distribution•Market might be saturated3M3M•Granulation–3M hooks (new technology)–They monitor new business activities•Reward employees who create new products•Granulation–3M hooks (new technology)–They monitor new business activities•Reward employees who create new productsFUN Group ActivityFUN Group ActivitySpinnerSpinnerAnd the winner is……And the winner
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