Book contents
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- 1 The challenge of organic growth
- 2 Profitable growth at Siemens Medical Solutions
- 3 UPS: Brown's organic growth story
- 4 Execution: making growth happen at The Home Depot
- 5 SYSCO: how has it achieved thirty-four years of continued growth?
- 6 Strategic position, organic growth, and financial performance
- 7 Defining and measuring organic growth
- 8 The make or buy growth decision: strategic entrepreneurship versus acquisitions
- 9 The misunderstood role of the middle manager in driving successful growth programs
- 10 Organic growth through internal corporate ventures
- 11 Linking customer management efforts to growth and profitability
- 12 Harnessing knowledge resources for increasing returns: scalable structuration at Infosys Technologies
- 13 Stay tuned: knowledge brokering via inter-firm collaboration in satellite radio
- 14 New directions for the study of organizational growth
- Index
- References
10 - Organic growth through internal corporate ventures
Published online by Cambridge University Press: 03 December 2009
- Frontmatter
- Contents
- List of figures
- List of tables
- List of contributors
- Acknowledgments
- 1 The challenge of organic growth
- 2 Profitable growth at Siemens Medical Solutions
- 3 UPS: Brown's organic growth story
- 4 Execution: making growth happen at The Home Depot
- 5 SYSCO: how has it achieved thirty-four years of continued growth?
- 6 Strategic position, organic growth, and financial performance
- 7 Defining and measuring organic growth
- 8 The make or buy growth decision: strategic entrepreneurship versus acquisitions
- 9 The misunderstood role of the middle manager in driving successful growth programs
- 10 Organic growth through internal corporate ventures
- 11 Linking customer management efforts to growth and profitability
- 12 Harnessing knowledge resources for increasing returns: scalable structuration at Infosys Technologies
- 13 Stay tuned: knowledge brokering via inter-firm collaboration in satellite radio
- 14 New directions for the study of organizational growth
- Index
- References
Summary
What options are open to a corporation when it “hits the wall” and its growth plateaus? One alternative is to revitalize and renew its core businesses (e.g. Waterman, 1987; Zook, 2001). Another is to acquire other companies, despite considerable evidence that the majority of acquisitions probably destroy economic value. A third alternative is to grow organically by extending today's businesses.
Along this third growth path, one choice is to extend an organization's geographic footprint. For example, after the fall of the Berlin Wall, HeidelbergCement was one of the first major cement manufacturers to enter the Polish market, which became a springboard for expansion into other Eastern European countries. From 1990 to 2004, HeidelbergCement built a network of plants covering every key geography in Central and Eastern Europe, and by 2004 it had the #1 market share in the region, although it is #4 in worldwide market share. Today, the key growth challenge for HeidelbergCement as for others in the industry is building market share in China.
Another possibility is expanding into new roles along existing value chains. For example, Apple Computer ignited a new wave of growth with its phenomenally successful iPod MP3 music player. To drive more sales of iPods, Apple launched its iTunes MP3-format music downloading service in April 2003. Apple's move into the distribution part of the music value chain created a new stream of revenues. Similarly, once manufacturers reach a certain size, they commonly establish financial services subsidiaries that start by financing equipment purchases.
- Type
- Chapter
- Information
- The Search for Organic Growth , pp. 172 - 191Publisher: Cambridge University PressPrint publication year: 2006