Growth Strategy - Article Review

M&A and Corporate Growth Strategies

Summarized readings:

1. Capron L, Mitchell W. 2010. Finding the right path. Harvard Business Review 88(7-

8): 102-107.

2. Olson MS, Van Bever D, Verry S. 2008. When growth stalls. Harvard Business

Review 86(3): 50-61.

Capron and Mitchell in their ‘Finding the right path’ publication summarize their findings on the growth pattern of the companies and argue that the majority of them rely extensively on one path to growth (Capron & Mitchell, 2010). This approach is not always the key to success as research shows that companies combining growth resources have a 46% higher chance of survival than the ones relying on a single way (Capron, Mitchell, 2010). In addition to this theory the authors provide us with a practical guideline, based on their research and case studies of numerous companies’ development patterns, to apply when implementing a company’s growth plan by means of organic growth, agreements, alliances or acquisitions. The authors claim that the key topics such as internal resource availability, the value perception of these between the partners and finally the level of engagement with the resources provider need to be considered in order to select the right mode of growth. In other words, the combination of expansion methods should not be random but depend closely on the strategic goals and capabilities a company has.

Internal development, being apparently the quickest way to reach the goal by a company, not always seems to be desired one. Particularly when the existing resources for instance know-how or technology are not advanced enough, a company is better off by seeking external possibilities to obtain them as in the case of General Electric’s CT scan launch,