Assignment 7 - Growth Analysis Companies that are seeking to grow and expand their lots have several options by which they can do this. Three of such options are briefly discussed below and they include acquisition, public stock offerings and pursing new marketing routes (Rank, 2012). Each of these comes with their own challenges and merits. For host companies like Westinghouse who may want to implement one or more of these options, what they need to do is to weigh all aspects of the options to come to terms as to whether or not a selected option has better avenues for growth than all other prevailing options.
Acquisition Acquisition basically refers to the situation whereby a company may want to have total assess to another company by making direct and full purchase. The advantage with this particular type of investment and business growth option is that it gives the buyer the opportunity to record immediate or sudden increase in size and threshold. This will happen without thinking of nurturing a new company right from the scratch. It would be noticed that companies that are nurtured from the scratch cannot be guaranteed on their growth and success rates.
Therefore, making acquisitions is like giving birth to an already grown baby and this comes with a lot of advantage for companies. In the case of Westinghouse, there would be the guarantee that all existing customers of the acquired company would automatically switch to Westinghouse. Westinghouse would therefore not have to spend much resource raising new customers. All of these not withstanding, Westinghouse would have some roles to play if they would want to maintain the size of the acquired company and their customer base.
This will include among other things revising the organizational culture to perfectly blend the taste and demand of customer of the two new companies. This option is however capital driven and may be too expensive to undertake. Public stock offerings The public may also be invited into the affairs of the company through public stock offerings. This will come in the form of selling stock products to the public. Once this happens, the company will now be deaing with a new set of shareholders.
These shareholders however do not constitute permanent owners of the company. This way, the shareholders will only have their representation at the decision making level. This will be an ideal option of growth for Westinghouse if keeping their core executive structure is a priority for them. This option is also preferred to merger because once merger takes place, owners and executives of the merging company would become direct and co-owners. This is a situation that can affect the running of the company against its core values and statues.
The risk of this particular option of growth how has to do with the fact that the trend and degree of growth will always be determined by market share price. This is a situation that will put the company’s fortunes in a state of constant fluctuation. Pursuing new marketing routes The last option is for the company to embark on new marketing routes. This will demand that the company locate and identify new markets whose demand is in direct consonance with the production of the company. This way, the company will establish a very strong representation in such locations.
To succeed in this however, a number of factors that will bring about competitive advantages need to be considered. This is said against the backdrop that there may be the likelihood that there will be existing competitors on the location where the new markets will be established. This is thus like saying that the fact that Westinghouse may be going in with a new market will not mean that the industry there will be new. REFERENCE LIST Strategic Management: Logic and Action, chapters 4 and 7 [Text] Nepal, B., Chinnam, R., Petrycia, J., Brush, E., Chisholm, C., Hearn, M., et al.
(2007). A quality-based business model for determining non-product investment: A case study from a Ford automotive engine plant. Engineering Management Journal, 19(3), 41-56. [Jones e-global library®: Academic Search Premier] Rank J. (2012). Business Expansion. Reference for Business. Accessed July 20, 2012 from http: //www. referenceforbusiness. com/small/Bo-Co/Business-Expansion. html