Strategies for Firm Growth

Abstract

Strategies for firm growth vary in terms of their degrees of novelty, uncertainty, and synergy. Modes of firm growth include replication (growth by ‘more of the same’), diversification, and internationalization. Growth strategies can be implemented using organic growth or through acquisitions. Desire to grow is a necessary but insufficient condition for growth – what also counts is the availability of growth opportunities. Empirical work has shown that growth is largely random – hence, hard to predict. Sustained growth is rare. Firms cannot always translate their ambitions into growth, but should pay attention to critical ‘decision points.’

Keywords: Firm growth, diversification, internationalization, Penrose, industry dynamics

JEL Classification: L25