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(2) Growth: The growth is fast in the market in which their products are sold.
(3) More profit margin: They tend to have larger than average profit margins.
(4) Stretch: A stretch rather than a fit strategy is pursued.
(5) New users etc: New markets, new products, new processes and new usage for old products are
regularly developed.
(6) Expansion: Internal expansions, mergers and acquisitions are used to achieve expansion.
(7) Globalisation: Shifting from local to global markets is an expansion sign.
(8) Diversification means adding new lines of business. These new lines of business may be related to
the current business or may be quite unrelated. If the new lines added, make use of the firm’s existing
technology, production facilities or distribution channels or it amounts to backward or forward
integration, it may regarded as related diversification. For example, Wipro which is in the business of
edible oils and soaps, has also diversified its business segments in information technology, etc.

“Desire to grow and expand“:
(a)Natural desire: A healthy firm normally has a natural desire for growth for its goodwill and other
reasons.
(b) Survival: Growth is essential for survival because if a firm does not grow when competitor firms are
growing, then it might lose its competitiveness.
(c) Market share: A company needs growth to increase its market share so as to capture more number
of customers.
(d) Market leader: Market leadership is an objective of growth for several companies and they want to
dominate the other firms.
(e) Avoidance of risks: A company needs to diversify its business to minimize risks. By it profit earned
by one product can be used for compensating for the losses of other product.
(f) Full utilization: Growth becomes essential for full utilization of the existing
resources of the company. Profit can only be maximized in the presence of full utilization of resources.
(g) Raising profit: To increase profits is the most obvious objectives of growth. More is the sale more is
the profit margin.
(h) Motivation for employees: People working in the organisation will be motivated only if there are
challenges, opportunities and growth in the enterprise. More job satisfaction is obtained in this way.
(ii) It is a strategy of expansion under which growth is achieved by expanding the scale of operations. It
involves expansion of firm’s product range and market. Three alternative strategies in this regard are as
follows:
(a)Market Penetration: This strategy aims to seek increased sales of the present products in the present
markets through more aggressive promotion and distribution. The firms tries to penetrate deeper into
the market to increase its market share. More money is spent on advertising and sale promotion to
increase sale volume,
(b) Market Development: This strategy aims to increase sales volume by selling the present products
into new markets
(c) Product Development: Under this strategy, a business seeks to grow by developing improved
products for the present markets.