Question

Apply Build-Borrow-Buy framework to Seventh Generation.

Answer 1

Many companies face the challenge to obtain the resources though good at identifying the resources they are required to grow. Because of their less attention to the right way to obtain resources, this becomes the challenge for them.There would be hindrances on the way for a company to obtain its resources.When a company plans to pursue new opportunity it may lack one or more type of resource. This might consist of technologies, methods,skills, know-how and competencies.Even highly regarded companies get into trouble in their growth due to the less attention they paid to obtain resources than identifying them.

The three main paths for a business growth are:

Build on existing internal resources.

Borrow from others through alliance agreements or contracts.

Buy other companies.

Leaders also skip the critical first step on deciding the way to obtain new resources thinking that the key factor lies in execution, whatever method they use.research shows that companies though successful in its execution but fails because of choosing the wrong mode of development.However some firms invest their resources on internal development programs rather looking existing resources to identify new skills and ideas.On the other hand others quickly focus on external resources missing opportunities to create new value from current internal activities.

When firms struggle on their growth, leaders try harder. Executives then fall into the implementation trap in which along with their staff perform the operations wrong.They tend to invest in learning how to manage on the right mode of growth and does with their best practices with that mode.Though they adopt the modes which have worked well in the past the implementation trap is deadly.If wrong modes used for growth, past implementation practices might not work well. According to research, companies that used multiple ways to grow outperformed those that focused on a single mode.

The rules for selecting growth modes are:

1.To be honest on depending on the internal resources: Always outstanding skills doesn't always contribute for company's growth.The executives have to be clear whether the firm's existing skills are strong enough to meet competitive opportunities.Sometimes companies underestimate on what they have and what they need, fail to recognize the difficulties to conduct in-house projects.

2.Acquisition has to be the last resort:Sometimes executives look for a short cut to grow their business neglecting borrowing modes such as alliances and contracts.Strong acquisition programs can overcome their rivals.Bank, insurance acquisitions are a good example. Alliances provide opportunities to learn from partners who are independent who are under flexible terms and at lower cost than acquisitions, at the same time keeping motivation in on achieving activities and goals.

3.Using alliances and contracts to obtain new resources:A contract specifies the use of external resources, the nature of resources the company need and the working relationship that a company needs to build with resource partner. Hence it is beneficial to use a contract.Through these resources which can be traded easily the Company can reap its benefits.A thoughtful contracting strategy helps to look for target resources without managing a complex alliance or integrate an entire organization.If a contract is not sufficient for the company to grow , alliances have to be considered which facilitates extensive collaborative resource sharing.Alliance has the greatest success chance when partner's goals are aligned with that of the company and the collaboration scope is focused on the contact of partners.If the company finds that it cannot align the goals of an alliance or need to develop a complicated partnership to manage complex activities, a full acquisition is a better choice.

4.Identifying an pathway of integration before deciding on acquisition: Acquisition is better when centralized control and unified ownership will help to exploit combined resources fully than the company achieves independently.Acquisitions require steps to exploit potential value and the company might get stuck in the issue of how to make the deal work .Figuring out how to make them work and then doing it takes time and is a hard work. After post deal integration there needs the selection to be undertaken, on deciding on acquisition when there is no clarity on success or would not be able to motivate people after the deal.On the other hand the company is less to succeed if the deal doesn't make sense.

5. Review the strategies when the Company realize that the options that it considers didn't work: Though acquisition is the last resort after being rejecting the other modes, the company can review the other complex versions such as more complex alliances or partial acquisitions of the options that it had rejected earlier.