To grow steadily and avoid stagnation, a company must learn how to scale up
and extend its business, lengthen its expansion phase, and accumulate and
apply new knowledge to products and markets faster than competitors.
Managers can't leave growth to chance. They need a plan that renders consis
tent sales growth over the long term - one that captures management's visio
n for expansion and that addresses the product and market combinations the
company intends to pursue, the size it hopes to achieve in a particular tim
e frame and the know-how and organizational structures needed.
Such planning has an internal focus. It aims to help a company exert more c
ontrol over its own fate as it rises Co external challenges. Three thriving
companies demonstrate three different strategies in action.
The Netscape experience shows how a company can scale up - do more of what
it already does well. Netscape went from $80 million in sales in 1995, its
first full year of operation, to $500 million just three years later.
IKEA used duplication - repeated the business model in new regions. Establi
shed in 1954 as a small domestic furniture manufacturer and retailer in Swe
den, by 1999 IKEA had 50,000 employees and a presence in 25 countries. As t
he authors explain in depth, IKEA's success is tied to the way it manages a
nd transfers knowledge.
SAP's growth strategy is an example of granulation - growing select busines
s units. SAP started with a basic enterprise-resource-planning system, then
moved to multiple products for e-commerce and Internet activities. Using o
ne product as a platform, it began allowing customers to fine-tune virtuall
y any resource-planning system.
The authors emphasize the importance of combining strategies for growth wit
h explicit strategies for learning. Companies must decide what kind of grow
th strategy they want to pursue, given their capabilities and market opport
unities. They must then make the strategy work by changing their structure
and processes in a way that lets them acquire or create specific knowledge
about new technologies, customers and industries. The integration of growth
strategies and learning strategies is at the heart of success.