Strategies for Diversification Product-market Alternatives

So it is in the American economy. Just to retain its relative position, a business firm must go through continuous growth and change. To improve its position, it must grow and change at least "twice as fast as that." According to a recent survey of the ioo largest United States corporations from 1909 to 1948, few companies that have stuck to their traditional products and methods have grown in stature. The report concludes: "There is no reason to believe that those now at the top will stay there except as they keep abreast in the race of innovation and competition." ^ There are four basic growth alternatives open to a business. It can grow through increased market penetration, through market development, through product development, or through diversification. A company which accepts diversification as a part of its planned approach to growth undertakes the task of continually weighing and comparing the advantages of these four alternatives, selecting first one combination and then another, depending on the particular circumstances in long-range development planning. While they are an integral part of the over-