Do Larger Organizations grow faster than the smaller ones? Growth Strategies...

Month on month and quarter and quarter growth is one of the key things in the minds of all business leaders..This is the case at all times but under extreme and unpredictable times like the last 4 to 5 months the factors to be considered have also increased or changed dramatically. While under normal times the focus was always on how to outdo your competition or enter a new market or product category successfully, these difficult times have also brought in several new factors which are to be considered. The priority factors might change if you’re an established market leader or a new upstart with a wonderful product..

Business leaders have long sought ways to predict the outcome of competitive fights so that the strategy could be followed again and again. Most people look at the attributes of the companies involved, predicting that larger companies with more and more resources to throw at a particular problem will beat the smaller companies. Is it always the bigger companies with the higher resources who manage to win....Let's look at a few critical market factors that influence growth.

• In every market there is a rate of improvement that customers can utilize or absorb. Consider of example the new and improved features that automobile companies keep providing us but as customers we can't utilize all the performances that are made available due to the conditions in which we use the vehicle like bad roads, traffic conditions, existing regulations etc. to name a few. Similarly consider the case of mobile handsets. Though manufacturers compete with each other on adding new features most of us don’t even use majority of the features due to variety of reasons. However, there will also always be a set of customers whose requirements are always ahead of what the manufacturers can provide. This could probably explain the huge demand that we see to buy some popular new handsets when they are launched.
• In every market there is a distinctly different trajectory of improvements that companies provide as they introduce new and improved products. In some cases, while the initial product which get launched are not able to meet the customer requirements, the products then quickly scale up to meet and exceed the customer requirements. Consider for example the initial word processors that were launched. They were then not able to match with the typing speed of the professional typists who had to very often wait for the computer processor to catch up with their typing speed. Today these word processors provide so much speed which most of us are not even able to utilize its capacity.

???????????c... Technology up gradations. Very often the market dynamics of a product category get suddenly altered because a new entrant has entered that existing market with a new technology ...But it has been found in such situations the existing markets leaders though might be caught unaware about this technology tends to stay and fight back. Let me explain that with a small example...

Before electronic cash registers came about NCR (National Cash Register) was the market leader in the mechanical cash register market. NCR never planned for the advent of the electronic cash registers that when they got launched the product sales of NCR dropped to zero ...For almost a year NCR survived on service revenues of its products in the market. But when the company launched its own electronic cash registers within a short period the company was able to recapture the same market share that it has before the advent of the electronic cash registers

So looking back the markets and product segments that they are operating in decides who has the higher chances for success. For example in a sustaining market scenario companies keep on improving the features of their products to meet the requirements of their customers and the higher end customers. The best example I could think of was the sales of Toyota Camry in the US market..Its annual sales in the US for the last 20 years has been around 3.9 lac care. They have continuously maintained markets leadership in that segment in all these years. Every year during this period the company has added newer and newer features to take care of its customer requirements...

So it would be safe to conclude that in sustaining markets it is the market leaders who are likely to maintain their leadership position ...Even when bigger corp-orates with deeper resources enter these mature markets they are not very often likely to succeed unless they bring in technology advances which the existing players do not have. The best example would be the copier industry where despite the bigger corporations like IBM and Kotak trying to dethrone Xerox it never bore fruit though they were bigger companies which higher resources. The firm which could finally dethrone Xerox was Canon which targeted this market with a tabletop copier strategy..

The situation reverses where were a more convenient product is being created for a market and would be sold at a lesser price. In these situations, were the challenge is to commercialize a more convenient product the smaller companies enjoy more success. Looking back more than the size of the organizations or the resources that they have at their disposal it’s the ability to put in place a strategy that enable managers to equally look at ideas targeted at all segments which is the key. With limited resources managers in established organizations tend to give more preference to projects which they feel will yield faster results and hence give priority to projects which add value to the existing set of customers ..Organizations which succeed to grow quarter on quarter and year on year are those which have built in systems while enable managers to give equal attention to address both the situations and are able to shape the idea into a good business plan and successfully launch the same in the marketplace.