High-Growth Business Development: Expansion Stage (Your first-ever Business e-Coach)

The Stage-by-Stage Guide

EXPANSION

Expansion

- the company has product revenues, expands its production and diversifies into new areas

Organization: Decentralizing

Management: Professional

Technology: Diversification

Funding Stage: 2^nd , 3^rd , Bridge

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Problem

Solution

Action

6.1

Growth Risk:

Reinventing your business model, experimenting extensively to find a successful new model and get to the next stage of growth
Development of an awesome flexible and innovative company structure (see slide show) adaptable to changing internal and external conditions
Development of an effective and flexible production systems responsive to change (see slide show)

Stick to what you do best and apply it in areas no one has considered before.
Reinvent your sustainable growth, competitive and differentiation strategy
Master the balanced business systems approach
Develop venture strategies
Maintain a purposeful and organized search for new opportunities
Build a coaching organization
Develop strategic alliances and joint ventures to support your growth program (see slide show)
Ensure staff participation in decision making; maintain good communication at every level of the organizational structure
Define the focus and develop a business plan for the expansion stage of your business. Treat your business plan as a work in progress
Create a distributed centerless corporation
Harness the power of diversity and manage cross-cultural differences

6.2

Failure of proven technologies placed in the new environment
Broadening and expansion of production lines draws resources from strategic development of the core technologies

Establishment of an intellectual property management system tailored to the requirements of the expanded markets (see slide show)
Management of project portfolio and prioritization between the core competence and expansion projects
Development of the ability to adapt quickly to requirements of the new marketplace
Development of an innovation-conducive environment in the company (see slide show)
Top management participation
Development of strategic technology development partnerships (see slide presentation)

Reinvent your intellectual property management system to meet the challenges of the expanded market.
Establish a technology intelligence system; carry out technology audit
Set strategic priorities and actions and develop a business strategy supporting continuous innovation
Develop and awesome innovative company
Harness the power of innovation - search continuously for new opportunities
Introduce modern motivation techniques (e.g. equity participation, options) to make your existing and new staff to be innovative
Establish partnerships to share the cost of short-focused research and innovations
Develop licensing strategy
Manage innovation separately through in-company startups or spinouts
Acquire new technologies and enhance strategic alliances
Explore the opportunities for licensing out your technology or establishing joint venture with local partners in the new markets
Study opportunities for mergers and acquisitions to best exploit your technological advantages

6.3

Marketing & Competing Risk:

Expand and re-target your marketing campaign
Research of the new markets
Research of the current market and its possible reaction to your expansion plans
Reinventing market development strategy
Development of marketing partnerships (see slide show)

Research the new target markets, define your competitive strategy and positioning strategy; play competitive war games
Adapt the laws of marketing to the new environment and develop your marketing strategy
Expand and train your marketing team
Unleash the power of your service-profit chain to gain more loyal customers
Revise critically your marketing approach
Develop realistic marketing concept
Reinvent your marketing, advertising and selling strategy
Develop marketing plan for the new markets
Develop innovative product selling customer relationship chain
Partner with your customers to create a future for both parties that is better than either could have developed alone
Access new markets through exporting your technology, joint ventures, or franchising; reinvent your licensing strategy
Establish strategic alliances and sales network in the new markets
Use the competitive war games approach to simulate the competitive environment, identify weaknesses, and make critical changes that produce a more complete and effective competitive strategy

6.4

Financial Risk:

Increased cash flow and requirements
Debt service exceeding cash flow
No ROI and capital investment analysis
Investments in unknown areas of geographical & channel expansion and broadened operating capabilities

Operating costs reduction through optimization of production systems
Raising of venture capital for expansion of the business (second, third rounds) and/or for preparation of the initial public offering (IPO) (see slide show)

Look at several measures of capital employment - not just one
Work back to costs from what customers are prepared to pay
Reduce inventory costs by developing lean production systems
Explore new opportunities for fundraising: international financing; public stock offerings; strategic alliances; mergers and acquisitions
Raise additional cash licensing your technology out
Enhance shareholder value by adopting a leading-edge reporting model
Upgrade you expense control system

6.5

Team & Management Risk:

Create the mindset of growth and establish the relentless growth attitude in your organization
Manage by objectives
Start with yourself, know your own values, strengths, weaknesses and use them effectively; practice effective self-management
To be a successful manager, learn how to innovate
Be an organization builder
Develop your leadership skills
Find, develop and manage high-level partnerships
Reduce your own involvement and delegate authority to professional management
Hire and leverage awesome people
Do the feedback analysis as a matter of course to build on your strengths
Gain really effective control by measuring performance and conducting a comprehensive business audit
Make sure you communicate clearly and often with colleagues, superiors, and subordinates
Establish management systems enabling better control, transparency, and customer relationships
Organize staff educational programs; hire and train lots of people
Develop information and decision support system driving the business