Existing frameworks on growth do not distinguish between the managerial challenges of different growth contexts; they place considerable emphasis on the overall quality of companies’ portfolios of strategic units, but less on how different units should be managed according to the growth context they are in. The manage- rial challenges of generating growth in low-growth contexts are very different from those of managing growth in high-growth contexts. This article introduces a matrix framework that incorporates four growth scenarios, which firm-units can map themselves on to, and then outlines the major barriers they face in each of these scenarios as well as the actions needed to overcome them. The results are based on longitudinal research on cross- national samples of small, medium, and large organizations
Long Range Planning
How does an established organization innovate its business model, which is still contributing revenues and profits, but whose future effectiveness is likely to be undermined by changes in its external environment? We study the antecedents and drivers of business model innovation in a Spanish dietary products business threatened by economic recession and heightened competition resulting from liberalization. We document the evolution of the firm's new retail-market business model in two distinct phases: 1) a five-year phase of experiment and exploration followed by 2) a high-growth exploitation phase when the firm outperformed its competitors by a wide margin and internationalized successfully, in spite of its products and final end customers remaining basically unchanged. The study, which takes a dynamic perspective, is situated in the organizational learning literature, and emphasizes the importance of trial-and-error learning for business model innovation. We also highlight the impact of the different types of learning that take place in these two phases, as well as the knowledge-transfer mechanisms from individuals to the organization and vice-versa.
We present a three-stage growth framework, in which we propose that the challenges for pan-European expansion of European technology companies can become opportunities and advantages for expansion beyond Europe. First, European technology companies are born in less competitive environments than their U.S. counterparts. Thus, the fragmentation of European markets in terms of languages, cultures, legislation and taxation means that they have the opportunity to embed themselves strongly in their home market contexts and are thus exposed mainly to local competitors in the start-up and early growth stages. Second, the very factor - fragmentation of markets - that enhances their survival potential in the start-up and early stages becomes a challenge that has to be surmounted for pan-European expansion. Third, once this challenge of fragmentation and diversity has been overcome through addressing the external and internal challenges (explained in detail in the article), we believe that European technology companies possess the right balance between being global and local to expand into Asia, Latin America and Africa.