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Strategies for Firm Growth



Abstract Article

Policy makers often think that creating more start-up companies will transform depressed economic regions, generate innovation, and create jobs. This belief is flawed because the typical start-up is not innovative, creates few jobs, and generates little wealth. Getting economic growth and jobs creation from entrepreneurs is not a numbers game. It is about encouraging the formation of high quality, high growth companies.
Policy makers should stop subsidizing the formation of the typical start-up and focus on the subset of businesses with growth potential. While government officials will not be able to “pick winners,” they can identify start-ups with a low probability of generating jobs and enhancing economic growth. By eliminating incentives to create these low probability companies, policy makers can improve the average performance of new businesses.


High Growth Firms

1) average annualized growth in employees (or turnover) greater than 20 per cent a year over a three-year period

2) 10 or more employees at the start

OECD DEfinition:

The importance of growing firms

  • Economic prosperity
- Employment contribution
- Innovation and knowledge creation
  • Profitability and creating value
  • Satisfying the ambitions of entrepreneurs

30 November 2020: Joint OECD-International Council of Small Business (ICSB) webinar.

« International Compendium of Entrepreneurship Policies » -OECD 12/2020

Types of start-up firms



Firms that basically provide
their owner(s) a similar
level of income to what
they would be able to earn
in a conventional job.


Firms that provide their
the opportunity to pursue
a particular lifestyle and
Make a living at it.


Firms that bring new
Products and
services to the market by
And seizing opportunities
regardless of the resources
they currently control.



…2 times (resp. 3 times less) middle-sized companies in France than in … UK (resp. in Germany)!!!

Growth Studies

Consistent, high performance companies have…

Strategic Focus

Operational Excellence

Growth Studies

Consistent, high performance companies have…

Constant Improvement

Customer Centricity

Growth Studies

Consistent, high performance companies have…

High Employee Engagement

A realistic view on growth

  • Growth should not be assumed; rather, it should be a decision made by weighing the pros and cons and the risks of growing and not growing.
  • Growth requires more people, processes and controls.

Not every owner wants a big firm

  • "I want to keep the personal feel because it's my life, this business, and I want it to be enjoyable and for the staff to enjoy it."
  • … I see my job as people management and for me that means keeping the excitement running. They are very competent people and if they are excited and bouncy then they are extremely productive.”
  • Comfort zone? Uncomfortable as soon as conditions change?

A realistic view on growth

  • If not properly managed, growth is destructive.
  • Growth can push you into a different and more competitive space where you will face bigger, more well capitalized players. The game will change.

Staying Small

The beauty:

  • Flexibility
  • Quality of products/services
  • Low overheads
  • Innovation


  • Marketing
  • Funding R&D
  • Management skills
  • Less ability to gain economies of scale

The myths of growth:

Can be good or bad:

  • Depending on managerial capacity
  • Complexity, rules, IS, hierarchy

Can be grow or die

  • The importance of increasing revenues
  • Key: customer value proposition

continuous growth: rare

  • Not linear

Founders’ Dilemmas

Dilemmas related to You career choice
Factors affecting the « When to found » Decision

  • Found early in career …
  • Before golden handcuffs get too strong
  • Before family handcuffs get too strong
  • Before becoming too specialized
  • Before becoming too reliant on employer resources

  • Wait to found until …
  • Build more human capital
  • Build more social capital
  • Build more financial capital

Divergent Levels of Growth in the Same Industry: Some Examples

  • Dailymotion versus YouTube

  • Sarenza versus Zalando

  • Kisskissbankbank versus Kickstarter

  • Viadeo versus LinkedIn

  • Weezevent versus Eventbrite

  • Deezer versus Spotify

  • Leetchi versus GoFundMe

Your examples are welcome

Some examples from Neoma ALUMNI


+ link

+ link

Two Unicorns





Vestiaire Collective

Some examples from Neoma Alumni

Fanny Moizant biography

Fanny Moizant serves as Independent Director of the Company. She is a graduate of the Reims Business School, which became the Neoma Business School in 2001, and of the Fashion, Design and Luxury Management program of the Institut Français de la Mode in 2007. During those years, she worked with the brands John Galliano, Dim and Mexx. In 2008, she participated in the creation of a digital platform dedicated to the online sale of pre-owned luxury clothing, known as “Vestiaire Collective". After noting the need expressed by fashion bloggers to sell their old luxury clothing in order to buy new articles, Fanny Moizant worked with a team of five professionals--an engineer, analyst, stylists and sales personnel, to launch the online platform in France in 2009. Within the Vestiaire Collective company, Fanny Moizant holds the positions of Co-Founder and President. Passionate about fashion and luxury, Ms. Moizant made an enormous contributed to the roll-out of Vestiaire Collective in markets that included the United Kingdom, Germany, Italy, Spain and the Scandinavian countries, before turning her focus to Asia

+ More on Fanny Moizant

A success story from Cesem In London:

Cécile Reinaud (Séraphine)

Cécile Reinaud on SkyNews: FRENCH

Cécile Reinaud on SkyNews: ENGLISH

Instill growth mindset … … and let them fly

"If you want to start and build a company, you are going to end up exhausted. So you might as well think about creating a BIG company. At least you will end up exhausted and rich, not just exhausted."

Patricia Cloherty
Past President, Patricof & Co. and NVCA
Former Chair, National Venture Capital Association
Founder & President, Delta Capital (Russia)

Values instilled in our courses

“The sky is the limit” mindset
Networking for growth
Early internationalization
Social innovation for change and impact
… by keeping their feet on the ground

Strategies For Firm Growth

Types of growth strategies

Internal growth strategies

External growth strategies

Internal growth strategies

Efforts taken within the firm itself for the purpose of increasing sales revenue and profitability

An important attribute is that a business relies on its own competencies, expertise, business practices, and employee capabilities.

It is also known as organic growth because it does not rely on outside intervention

  • It involves designing, producing, and selling new products (or services)
  • In many fast-paced industries, new product development is a competitive necessity.
- Any examples?
  • High-risk strategy
- Why?
  • The key is developing innovative new products

Internal Growth strategies


  1. Potential market was overestimated
  2. Too expensive
  3. Poorly designed
  4. “me too” product
  5. Cost of development too high

Internal Growth strategies

top 5 reasons new products fail

  • A firm can often increase its revenue by
- Enhancing quality
- Making it larger and smaller
- Making it more convenient to use
- Improving its durability
- Making it more up-to-date
  • Typically much less expensive to improve than to develop a new one

Internal Growth strategies

Improving an Existing Product/Service

  • Actions taken to increase the sales of a product/service through greater marketing efforts,
- By increasing advertising expenditures,
- Offering sales promotions,
- Lowering the price,
- Increasing the size of the sales force,
- Or increasing a firm’s social media efforts
  • Or through increased production capacity and efficiency,
- by expanding plant and equipment, or
- by outsourcing a portion of the production process

Internal Growth strategies

Increasing the Market Penetration of an Existing Produt/Service

  • Making additional versions of a product so that it will appeal to different clientele
- Example?
  • or making related products to sell to the same clientele
- Example?

Internal Growth strategies

Extending Product Lines

  • Most common in retail settings
  • Successful geographic expansion requires:
- Perform successfully in the initial location
- Additional locations can learn from this experience
  • Establish the legitimacy of the business concept in the expansion locations
- Don’t assume that if it works at the initial location, it will work at the new location
  • Don’t isolate the expansion location
- New location requires adequate training and oversight from the headquarters

Internal Growth strategies

Geographic Expansion

Internal Growth strategies

Advantages and Disadvantages

External Growth Strategies

Establishing relationship with third parties

  • Mergers, acquisitions, strategic alliances, joint ventures, licensing, franchizing

More fast-paced, collaborative approach towards growth

Allow smaller firms to form strategic relationships with large firms

  • A merger is the pooling of interests to combine two or more firms into one
  • An acquisition is the outright purchase of one firm by another
  • Startups are more commonly involved with acquisitions than mergers
  • An acquisition can fulfill several needs of a firm, like
- Expanding its product line
- Access to distribution channels
- Achieving economies of scale
- Access to new, useful technology
- Access to talented, experienced employees

External Growth strategies

Mergers and Acquisitions

A strategic alliance is a partnership between two or more firms developed to achieve a specific goal.

  • Technological alliances
- Cooperation in R&D, engineering and manufacturing
  • Marketing alliances
- Typically match a firm that has a distribution system with a firm that has a product to sell

External Growth strategies

Strategic Alliances and Joint Ventures

Case Study - Fetchr

What areas should Fetchr focus on to find the right candidate?

A joint venture is an entity created when two or more firms pool their resources to create a separate, jointly owned organization

  • Gaining access to a foreign market is a common reason
  • In other cases, we have:
Scale joint venture

- Partners collaborate at a single point in the value chain to gain economies of scale in production or distribution

Link joint venture
- Objectives of parties may be different, position of parties is not symmetrical

External Growth strategies

Joint Ventures

The granting of permission by one firm to another for using a specific form of its intellectual property under clearly defined conditions
Also works well for firms that create innovative products but do not have the resources to commercialize them
Technology licensing
- Firms develop technologies for their own products and then license them to noncompetitors
- Firms focused on developing new products pass on their new technologies to firms that are more marketing oriented and have resources to bring products to markets
Merchandise and Character licensing
- Licensing of a recognized trademark or brand:
- If a firm licenses its trademark too broadly, it can lose control of the quality of products with which its trademark is identified

External Growth strategies


External Growth strategies

Advantages and Disadvantages