Balanced Scorecard Benchmarking Business Process Reengineering Collaborative Innovation Core Competencies Customer Relationship Management Customer Segmentation Decision Rights Tools Downsizing Growth Strategy Tools Knowledge Management Lean Six Sigma Loyalty Management Mergers and Acquisitions Mission and Vision Statements Online Communities Outsourcing Price Optimization Models Scenario and Contingency Planning Shared Service Centers Strategic Alliances Strategic Planning Supply Chain Management Total Quality Management Voice of the Customer Innovation Related topics Adjacency Expansion Managing Innovation Market-Migration Analysis Description Growth Strategy Tools focus resources on seizing opportunities for profitable growth. Evidence suggests that profit grown through increasing revenues can boost stock price 25 percent to 100 percent higher than profit grown by reducing costs. Growth Strategy Tools assert that profitable growth is the result of more than good luck-it can be actively targeted and managed. Growth Strategy Tools alter a company's goals and business processes to challenge conventional wisdom, identify emerging trends, and build or acquire profitable new businesses adjacent to the core business. In some cases these strategies involve redefining the core. They typically require increased R&D investments, reallocation of resources, greater emphasis on recruiting and retaining extraordinary employees, additional incentives for innovation, and greater risk tolerance. Methodology Growth Strategy Tools search for expansion opportunities through: Internal ("organic") growth, including: Greater share of the profit pool for existing products and services in existing markets and channels; New products and services; New markets and channels; Increased customer retention. External growth (through alliances and acquisitions): In existing products, services, markets and channels; In adjacent businesses surrounding the core; In noncore businesses. Successful implementation of Growth Strategy Tools requires managers to: Communicate the importance of growth; Strengthen the creation and circulation of new ideas; Screen and nurture profitable ventures effectively; Create capabilities that will differentiate the company in the marketplace of the future. Common uses Managers employ Growth Strategy Tools to improve both the strategic and financial performance of a business. By strengthening and expanding the company's market position, Growth Strategy Tools improve both top-line and bottom-line results. Growth Strategy Tools also may be used to counteract (or avoid) the adverse effects of repeated downsizing and costcutting programs. Related Bain capabilities Core growth Growth strategy Growth through adjacencies Selected references Carroll, Paul B., and Chunka Mui. Billion-Dollar Lessons: What You Can Learn from the Most Inexcusable Business Failures of the Last 25 Years. Portfolio, 2008. Christensen, Clayton M. The Innovator's Dilemma: When New Technologies Cause Great Firms to Fail. HarperBusiness, 2000. Collins, Jim. Good to Great: Why Some Companies Make the Leap... and Others Don't. Collins Business, 2001. Joachimsthaler, Erich. Hidden in Plain Sight: How to Find and Execute Your Company's Next Big Growth Strategy. Harvard Business School Press, 2007. Kim, W. Chan, and Renée Mauborgne. Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant. Harvard Business School Press, 2005. Larreche, J.C. The Momentum Effect: How to Ignite Exceptional Growth. Wharton School Publishing, 2008. Olson, Matthew S., and Derek van Bever. Stall Points: Most Companies Stop Growing-Yours Doesn't Have To. Yale University Press, 2008. Tabrizi, Behnam N. Rapid Transformation: A 90-Day Plan for Fast and Effective Change. Harvard Business School Press, 2007. Tomasko, Robert M. Bigger Isn't Always Better: The New Mindset for Real Business Growth. AMACOM, 2006. Zook, Chris. Beyond the Core: Expand Your Market Without Abandoning Your Roots. Harvard Business School Press, 2004. Zook, Chris. Unstoppable: Tapping Hidden Assets to Renew Your Core and Fuel Profitable Growth. Harvard Business School Press, 2007. Zook, Chris, with James Allen. Profit from the Core: Growth Strategy in an Era of Turbulence. Harvard Business School Press, 2001.