intensification strategy is a which type of growth( internal, external, outsourcing,global)
Answers
Answer:
no
Explanation:
Growing a business is the process of of improving some measure of a comany’s success. A business can grow in terms of employees, customer base, international coverage, profits, but growth is most often determined in terms of revenues. There are different ways of growing a business. Igor Ansoff identfied four strategies for growth and summarized them in the so called Ansoff Matrix. The Ansoff Matrix (also known as the Product/Market Expansion Grid) allows managers to quickly summarize these potential growth strategies and compare them to the risk associated with each one. The idea is that each time you move into a new quadrant (horizontally or vertically), risk increases. The four strategies are:
Market Penetration: selling more of the company’s existing products to existing markets. To penetrate and grow the customer base in the existing market, a company may cut prices, improve its distribution network, invest more in marketing and increase existing production capacity
Market Development: selling more of the company’s existing products to new markets. This strategy is about reaching new customer segments or expanding internationally by targeting new geographic areas.
Product Development: developing and selling new products to existing markets Product development means making some modifications in the existing products to give increased value to the customers for their purchase or developing and launcing new products alongside a company’s existing offering.
Diversification: entering new markets with new products that are either related or completely unrelated to a company’s existing offering. Diversification in turn can be classified into three types of diversification strategies:
Concentric/Horizontal diversification (or related diversification): entering a new market with a new product that is somewhat related to a company’s existing product offering
Conglomerate diversification (or unrelated diversifcation): entering a new market with a new product that is completely unrelated to a company’s existing offering
Vertical diversification (or vertical integration): moving backward or forward in the value chain by taking control over activities that used to be outsourced to third parties like suppliers, OEMs or distributors
Ansoff Matrix
Figure 1: Ansoff Matrix
Generally speaking, business growth can be classified into internal growth and external growth. This article will discuss the various growth strategies and explain the differences between them.
Internal Growth
Internal growth (or organic growth) is when a business expands its own operations by relying on developing its own internal resources and capabilities. This can for example be done by assessing a company’s core competencies and by determining and exploiting the strenght of its current resources with the aid of the VRIO framework. Moreover, companies can decide to grow organically by expanding current operations and businesses or by starting new businesses from scratch (e.g. greenfield investment). Important to note here is that all growth is established without the aid of external resources or external parties. Internal growth has a few advantages compared to external growth strategies (such as alliances, mergers and acquisitions):
Knowledge improvement: organic growth strategies improve the company’s knowledge through direct involvement in a new market or technology, thus providing deeper first-hand knowledge that is likely to be internalized in the company
Investment spread: gradually growing internally helps to spread investment over time, which allows a reduction of upfront costs and commitments, making it easier to reverse or adjust a strategy if conditions in the market change