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Horizontal and Vertical Growth, Research Paper Example

Pages: 1

Words: 261

Research Paper

A key consideration in company operations is the form of growth sought and experienced. A business can experience growth in several ways. Among the most notable directions of company expansion are patterns of horizontal and vertical growth. Companies that are focused on vertical growth may be more interested in dominating a specific market than those companies who practice horizontal growth. Expansion into new products and/or services is an example of horizontal growth, as a company with this focus would not necessarily dominate their current market(s), but may instead be interested in gaining a similar share in a variety of markets.

Coca-Cola is an example of a company that has experienced vertical growth as a result of their business strategy. This company is a powerhouse in the soft drink market, and they have consistently been among the top producers of these products. Coca-Cola is a perennial force in the soft-drink market, but the company has not even attempted expansion into other markets, demonstrating their desire to engage in vertical as opposed to horizontal growth.

In stark contrast to Coca-Cola, the Virgin Group is an organization that has thrived through horizontal expansion. This conglomerate has experienced success in travel, entertainment, and a host of other business ventures (BusinessWeek, 2012). Virgin has become a brand in itself, and this symbol can be found on anything from spaceships to comic books. The recognition of this brand has allowed the Virgin Group to experience massive horizontal growth through multiple-product branding and continual expansion into new markets.

 

Reference

BusinessWeek. (2012). Virgin Group Ld.: Private company information. Retrieved from    http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapid=36  312

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