Strategic Thinking for the Next EconomyIt has been said that companies can grow themselves right out of business.Strategic Growth OptionsGrowth Strategy: ScalingShould a company use scaling?Methodology of ScalingSlide 7Growth Strategy: DuplicationMethodology of DuplicatonShould a company use duplication?Growth Strategy: GranulationShould a company use granulation?Looking at all Three MethodsGroup ActivityFedEx: BackgroundSlide 16Group Case StudyConclusionQuestions?Strategic Thinking for the Next EconomyChapter 12:Three Strategies for Managing Fast GrowthIt has been said that companies can grow themselves right out of business. Growth as a product of circumstanceFocus on short-term survivalThe key to successful corporate life is steady growth.Can’t leave growth to chanceFocus should be on the future and company’s directionStrategic Growth OptionsScalingDuplicationGranulationTip: There is no one best strategy, companies may use more than one of the options. Just make sure to focus on Organization LearningKnowledge AcquisitionKnowledge TransferGrowth Strategy: ScalingDefinition: Doing more of what you are good atStart with a coherent vi si on of products, technologies and customersFocus on a concrete product, technology and customer segmentImplement vision quicklyShould a company use scaling?Is the market is potentially large enough for rapid growth in a focused product line?Does the product creates unique value?Will there be low cost for wide product distribution?Methodology of ScalingInvest aggressively before apparent sales growthexpand core technologies, product lines; get new customers with existing distribution channels;increase manufacturing capacity;enlarge corporate infrastructure.Specialize and standardizeCentralize and standardize administrative areasMethodology of ScalingHire the right mixlearn quickly and share insights; right people at right positionsAdapt the structuresright organizational structures, processes and culture; multi-divisionsLearn from customers earlygood sense to the marketGrowth Strategy: DuplicationDefinition: Repeat the business model in new regionsStarts with a coherent vision of products, technologies, and customer segments.The vision must include goals for geographical expansionMethodology of Duplicaton Balance standardization and adaptation Hire flexible, independent managers Duplicate key parts of the infrastructure Duplicate entrepreneurial knowledge Be aware of the limitationsShould a company use duplication?Growth by duplication works best whenThe business requires physical presence and the company can repeat its business model in new geographic marketsThere is a need for better distributionThe company can adapt its experience in product development, manufacturing and marketing approaches fairly easilyGrowth Strategy: GranulationDefinition: Aggressively growing smaller business unitsInternal entrepreneur’s paradiseDeveloping unique capabilitiesCreating new businessesUse existing assets in new waysGain external knowledgeResearchAcquisitionAlliancesShould a company use granulation?When to useScaling and Duplication have hit their limitsRelevant markets conqueredProduct demand is flatteningNew technology available Possible substitute to current productProtect position by adopting new technologyCompany is sufficiently matureMonitor new business activitiesLearn about new markets and competitionLooking at all Three MethodsWhich method is best for our firm?Simultaneous approachCan work for larger companiesGenerally a natural progressionScaleDuplicateGranulateGroup ActivityPlease get into 5 separate groupsWe are going to evaluate 9 different scenarios from FedEx to further understand the three methods of strategic growthYour group should pick the growth strategy that best suits each scenarioFedEx: BackgroundOn the first night of continuous operation, 389 Federal Express Employees and 14 Dassault Falcon jets delivered 186 packages overnight to 25 US cities-and the modern air/ground express industry is born.Federal Express introduces the Overnight LetterFederal Express aquires Gelco Express Interenation and launches operations in Asia PacificThe first PC-based automated shipping system, later named FedEx PowerShip, is introducedFederal Express introduces SuperTracker, a hand-held bar code scanner system that captures detailed package informationThe Federal Express Clear Electronic Customs Clearance System is created to expedite regulartory clearance while cargo is en routeParent company FDX is renamed “FedEx Corporation.” Services are divided into companies that operate independently yet collectively: FedEx Ground, FedEx Global Logisitics, FedEx Custom Critical and FedEx Servies. FedEx introduces customer technology solutions including a redesigned fedex.com, FedEx e-Commerce Builder, FedEx Global Trade Manager and FedEx Ship ManagerFedEx Corp. acquires American Freightways, a less-than-truckload carrier serving the 40 eastern states in the USFedEx Corp. acquires Kinko’s, which expands the company’s retail access to all of the 1,200+ Kinko’s stores for greater customer convenience and increases in its portfolio of servicesGroup Case StudyHandout5-minute Group HuddleClass DiscussionConclusionA firm must manage growth!Scaling = Focus on core competencyDuplication = FranchiseGranulation = DiversificationThere is no one best strategy!What was Google’s