Organic Growth Compared to Growth Through Acquisition - Coursework Example

Organic growth compared to growth through acquisition Part Organic growth compared to growth through acquisition Advantages Disadvantages Organic Growth a) Ability to deliver unique value propositions Creating a value proposition is a critical business strategy for an organic company since it is a promise to deliver value to customers. Organic growth focuses on designing a product or service from scratch with the hope that when it’s laid in front of a customer it will be accepted. The managers input their all in brand designing, imaging and marketing which in most cases give rise to unique products and services in the market by researching on customer experience and the benefits it will have in the market as compared to growth through takeovers since a company will take up the brand of the previous owners with limited chances of changing or enhancing the product or service (Hess and Kazanjian 2006). a) Non reduction of competition in the market When companies merge or company A acquires company B they get an upper hand in terms of more skills, more resources and a wider scope of the market which enables them to counter the completion in their market. The company already has an image of their brand in the mind of their partner or previous owner customers cutting down on the cost of input making it a force to reckon with for their potential competitors as compared to starting up from zero with the use of organic growth structure where a company has nothing to build from in terms of brand image and market channelling of products, this slows down the competitiveness of the company especially in a highly competitive market. b) Brand building and market channels to improve customer service Organic growth offers options and choices on market and industry tendencies through its strategic vision of the business since it has new, clear and unique management principles on how the company wants to build its brand and ways to channel the brand into the market. This growth strategy focuses on the market tendencies by comparing the product against the worst possible alternative. This gives a realistic view on how they can a company can narrow down and understand how to choose the next best alternative option that will improve how they brand their products and the strategies they use to channel the products into the market as new timers (Tan and Mahoney 2007). Acquisition growth already has existing brands and market channels these makes it hard and entails more finances being invested to change or improve their customer service since there is an existing strategy put in place by the company being acquired as compared to starting up a growth strategy from scratch with clear objectives on operations (Mogetti 2002). b) Limited addition of new products and services brands An acquiring company brings forth additional products and services that already have an existing brand but a company that starts up to create a brand will be limited to the number of new brands that it will introduce in the market due to the high risk and financial constraints that the process will have on the company Growth Through Acquisition a) Unlimited addition of new products and services brands An acquiring company brings forth additional products and services that already have an existing brand but a company that starts up to create a brand will be limited to the number of new brands that it will introduce in the market due to the high risk and financial constraints that the process will have on the company a) Inhibits brand building and market channels to improve customer service Organic growth offers options and choices on market and industry tendencies through its strategic vision of the business since it has new, clear and unique management principles on how the company wants to build its brand and ways to channel the brand into the market. This growth strategy focuses on the market tendencies by comparing the product against the worst possible alternative. This gives a realistic view on how they can a company can narrow down and understand how to choose the next best alternative option that will improve how they brand their products and the strategies they use to channel the products into the market as new timers (Tan and Mahoney 2007). Acquisition growth already has existing brands and market channels these makes it hard and entails more finances being invested to change or improve their customer service since there is an existing strategy put in place by the company being acquired as compared to starting up a growth strategy from scratch with clear objectives on operations (Mogetti 2002). When a company realises its growth rates by increasing its output sales, customer based expansion as a result of good management and effective utilisation of internal resources to expand profits it is said to be undergoing Organic growth (Campbell, Stonehouse and Houston 2002). While when a company takes over another company through ownership of stakes so as to give them control over its operations as a growth strategy it is said to have gone through the process of acquisition or merging. These two growth strategies have their merits and demerits depending on how the management implement them. I will focus on the advantages and disadvantages of organic growth as compared to growth through takeovers (Hess 2007). Companies that have developed through Organic Growth Many companies have grown tremendously through organic growth. The most established corporation that has used this Apple Inc. The company became a success in the markets because Apple top leadership ensured the company has delivered unique value propositions. The company valued the customers very much. They delivered the best products and services to the customers. This was made possible by setting up trends in innovating products with the hope that when the present their final products such iPhone and iMac to a customer they wont hesitate to buy them as said by the founder Steve Jobs. Another notable company is McDonalds. Experts note that the company became successful by mainly focusing on brand building and market channels to improve customer service in order to enhance growth strategy. For instance, when the company wanted to revive its sales rate they came up with more healthier and fresh foods to cover a larger market target. Part 2 Differences and similarities of different fields of Strategy work. Similarities Differences Senior executive teams Strategists - They have a responsibility of developing and formulating long-term strategies that go hand in hand with the organisation vision and objectives. Mobilizing - They play a proactive role in bringing together stakeholders, human and non human resources and skills to get things to be done quicker to attain the set objectives. Middle and front line managers Strategy implementers - Their role is to implement the strategies formulated by the senior managers to the other employees in the realisation of the organisational goals. Mobilizing - They play a secondary role in mobilizing especially human resources through team building in departments that they serve in and they keep them up to date on the changes undergone in objective setting of a company. Strategy specialists e.g. analysts and planners Strategy researchers - They play a pivotal role as planners’ trainers and facilitators of strategy formulation and implementation to help managers to effectively perform to attain organisational goals. Planner - Planning being one of their major roles they assist managers by predicting the economical trends in the market. They set their strategy plans based on how the economy is fairing on enabling managers to avert the risk of experiencing major losses and failure in their operation system. Strategy Consultants Recommend strategies - Consultants give company managers a directive on what strategies that is effective in a long or short period of time and the best methods to use in implementation to realise great numbers in their profits. Improvement role - Consultants after evaluating the strategies that a company has adopted they make necessary improvements to those strategies that seem non efficient in organisations’’ vision realization. Strategy jobs after University and further education levels in the field A student in the field of business related courses after graduating has many options to choose from when it comes to the job they would like to major in. Organisations rely on strategies that will facilitate Suitability Accessibility and Feasibility in management objectives (Wheelen and Hunger 2004). The jobs one can be eligible to include Middle level managers in fields such as human resource management, Operations managers, finance managers and procurement officers but will mostly be focused on assisting roles then after attaining the needed experience and acquisition of new skills one can be promoted to a managerial position (Mascarenhas 2011). To advance further in the chosen career one need to further their education in courses like; Strategy Planning, Multi-project manager and risk management (Hitt 2007). Part 3 The difference between Strategic Management and Strategic leadership Strategic Management Strategic Leadership When an organisation has a scope with a clear direction on long term achievements that gains an advantage over the changing factors in an environment through utilization of resources to be competitive in the market of interest and the end satisfy the expectations of the Stakeholders. (Hitt, Freeman and Harrison 2001). . If a person in a company is able to inspire and influence others by shaping up decisions and delivering high valued results the person is said to be a strategic leader and the process of doing this is known as strategic leadership whereas the process of getting things done by exercising authority by planning and organising goal (Wheelen and Hunger 2004). Compliance Private Acceptance Source: BMK Associates. Figure 1 Chief Executives that have demonstrated effective strategic leadership Steve jobs-Apple Inc. Being the renowned founder of the now successful Apple Inc. is a clear indicator of how his leadership traits .He did innovations of great products that led consumers to scramble for them. He adopted the organic growth strategy and influenced his colleagues to put in their all. He qualifies to be a strategic leader since he has a great ability of making decisions that involved critical analysis. Steve Jobs demonstrated transformational leadership. He was the type of leader who made contact with other employees in order to exchange something valued. Employees who worked under Mr. Jobs argued that he used praise, intimidation, and coercion in order to gain control. As demonstrated in numerous articles, Mr. Jobs is often described as being charismatic. He used this characteristic to gain control of his subordinates. During his time at Apple, Mr. Jobs demonstrated very many trait theories. His personality contributed to make him one of the best leaders in the world. He was very honest in his undertakings and demonstrated assertiveness. His decision making skills were absolutely the best. This is validated by his choice of the innovative products that he wanted his company to provide to customers. Additionally, many employees who worked under him argued that he allowed them to provide input before making a strategic decision. In broader terms, he was a democratic leader. Meg Whitman-eBay Meg Whitman is the CEO of eBay. She nurtured her leadership qualities by being a good listener and learning from many companies. Miss Whitman began her career in brand management at Proctor and Gamble. From then, she started working for very many companies and was always the ‘new employee’. By doing this, she came to believe that customers are the greatest asset of any firm. Building on this belief, Miss Whiteman has made eBay a very profitable company. Meg Whiteman believed that collaborating with employees is the best way of realizing the best out of them. She really hated the ‘controlling’ type of managers. In eBay, Miss Whiteman has built relationships with her employees. No employee has ever complained that their CEO is controlling. Additionally, Miss Whiteman trusts all people she encounters because she believes people are good. She is a supportive leader because at many times she emotionally supports her employees. She treats them with respect and utmost care. Bill Gates-Microsoft Bill Gates, founder of Microsoft, demonstrates transformational leadership just like Steve Jobs. He usually trusts his subordinates, motivates the employees, teach the staff, gives power of thought, listens, plans and demonstrates ability to implement the plans, and admits mistakes. Bill gates fits very well in Fielder Model. The main tenet of this model is that effective leadership is as a result of interaction between the style of the leader and the characteristics of the environment in which the leader works. Bill Gates leadership style can be categorized as autocratic. He wants to be in control and often checks up and manages what the employees are doing. Additionally, he has a delegate style of leadership. This is validated by the fact that Mr. Gates usually recruits and retains the best talent. When looking for new managers, Mr. Gates looks at the candidates’ ability to ask probing questions, ability to gain knowledge quickly, and good understanding of software structures. After finding the best managers, he delegates duties and responsibilities to them because he believes they can do what he aspires. Reference List BECKER, B. E., HUSELID, M. A., & BEATTY, R. W. (2009). 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