The growth strategy is a corporate-level strategy that seeks to increase the level of the organization’s operations. This includes increasing such popular quantitative measures as sales revenues, number of employees, and market share. Growth can be achieved through direct expansion, vertical integration, horizontal integration, or diversification.
Growth through direct expansion is achieved by internally increasing a firm’s sales, production capacity, or workforce. No other firms are acquired or merged with; instead, the company chooses to grow by itself through its own business operations. For instance, McDonald’s has pursued a growth strategy by way of direct expansion. The company has grown by awarding franchises (经营许可) to people who are willing to be trained in the McDonald’s way and by opening company-owned outlets.
A company might also choose to grow by vertical integration, which is an attempt to gain control of input (backward vertical integration), output (forward vertical integration) or both. In backward vertical integration, the organization attempts to again control of its inputs by becoming its own supplier. For instance, United Airlines had created its own in-flight food service business. In forward vertical integration, the organization gains control of its outputs (products or services) by becoming its own distributor. For example, Gateway Computer’s retail stores are an example or an organization controlling its distribution.
In horizontal integration, a company grows by combining with other organizations in the same industry — that is, combining operations with competitors. For instance, H, J, Heinz, Inc., the food-processing company, combined operations with an organic baby food company, Earth’s Best, to help its own Heinz baby foods division become more competitive. Because combining with competitors might decrease the amount of competition in an industry, the U. S. Federal Trade Commission assesses the impact of such proposed growth action and must approve any proposed horizontal integration strategy. Other countries have similar restrictions.
Finally, an organization can grow through diversification, either related or unrelated. Related diversification is when a company grows by merging with or acquiring firms in different but related industries. For example, American Standard Cos. is in a variety of businesses including bathroom fixtures, air-conditioning and heating units, plumbing parts, and brakes for trucks. Unrelated diversification is when a company grows by merging with or acquiring firms in different and unrelated industries. For example, Lancaster Colony Corporation makes salad dressing, car mats and candles. These industries are different and unrelated.
1.What is this passage mainly about?
2.What is “direct expansion”？
3.Which of the following is not true of “vertical integration”?
4.If a company adopts the method of “horizontal integration”, it attempts to（ ）.
5.Which of the following phrases is closest in meaning to the word“diversification”？
