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MBA 870:
Strategic Management

7th Class Session

September 30th, 2014

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Which Way to Grow

• Two Broad Way:
• Internal  organic growth
• External  partnering (i.e. M&A or SA)

Firm’s Value Proposition

• Capabilities
• Assets
• Cultural DNA

Growth will naturally flow?

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Which Way to Grow

• Three is the magic number
• Price-value leaders: expand to adjacent markets (e.g. Walmart and the grocery business)
• Relational-value players: expand scope by broadening the definition of a solution (e.g. IBM with integrated solutions)
• Performance-value leaders: expand through continuous innovation (e.g. R&D shops like Merck…)

Long-term winners sustain their growth by edging out from their core, with natural extensions of their resources, or by reaching out with those resources into new markets