How to understand the relationship between industry outlook and growth strategy
How to Establish a Correct Industry View
As the name implies, "industry view" is people's basic views and viewpoints on the world, and its formation stems from the process of people's thinking from the isolated, fragmented and closed cognition of the industry to the overall, connected and open cognition.
How to establish an industry outlook? First, answer the following three basic questions:
First, why is it necessary to engage in industrial activities?
Second, what industry should be developed?
Third, how to develop these industries?
Secondly, when answering these three questions, it is necessary to take a holistic, connected and open viewpoint as a guide to clearly describe and grasp the internal and external factors that affect the development of the industry and their interrelationships. Specifically, we can think about the industry according to the following five dimensions, and distinguish the traditional industry view from the innovative industry view.
How to understand the relationship between industry outlook and growth strategy
Growth strategies and their characteristics
Growth Strategies, also known as Expansion Strategies, Attack Strategy, and Growth Strategies, from the perspective of enterprise development, any successful Enterprises should go through different periods of growth strategy implementation, because in essence, only the growth strategy can continuously expand the scale of the enterprise, so that the enterprise can develop from a small enterprise with weak competitiveness to a large enterprise with strong strength.
A growth strategy has the following five characteristics:
Businesses that implement growth strategies do not necessarily grow faster than the economy as a whole, but they tend to grow faster than the markets in which their products operate. The growth of market share can be said to be an important indicator to measure growth. The manifestation of the growth strategy should not only increase the absolute market share, but also increase the relative share based on the growth of the total market capacity.
Enterprises that implement growth strategies often achieve a profit level that greatly exceeds the average social profit rate. Due to the faster development speed, these enterprises are more likely to obtain better economies of scale, thereby reducing production costs and obtaining excess profit margins.
Companies adopting growth strategies tend to use non-price means to compete with competitors. Because the enterprises that adopt the growth strategy not only make efforts in developing the market, but also strive to have a competitive advantage in the development of new products and management models. Generally speaking, these enterprises will use more innovative products and services and high management efficiency as a means of competition. Therefore, this is not a price war that hurts itself.
The growth strategy encourages the development of enterprises to be based on innovation. These enterprises often develop new products, new markets, new processes and new uses of old products in order to seize more development opportunities and seek greater risk returns.
Rather than simply adapting to external conditions, businesses that employ growth strategies tend to change the external environment and make it fit for itself by creating something or a need for something that did not exist on its own before. This kind of guiding or creating a suitable environment is determined by the characteristics of its development. Therefore, in order to truly achieve the established development goals, it is necessary to have a specific and suitable external environment, and passive adaptation to the environment is obviously not necessarily helpful.
How to understand the relationship between industry outlook and growth strategy
The relationship between industry view and growth strategy
The growth strategy is closely linked with the company's industry view, and what type of industry view will have what type of growth strategy. From the perspective of the traditional industry view, the basic profit rate and business model of each industry are established, so the growth of corporate profits must be generated through the scale effect or monopoly profits brought by the expansion of scale, or through diversification. Industries with high underlying profit margins to bring increased profits and identify opportunities in other industries. And in the perspective of innovative industry view. The basic profit rate and business model of the industry are both variable and can be created, so that the growth of the company's profits can be achieved by predicting the direction of industrial evolution, carrying out business model innovation around value innovation, cultivating industry leading advantages, and forming a sustainable industry. The business ladder that continuously supports the company's performance growth has been realized.