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IIDS Lect 3_ Part 1: Growth and innovation (FOCUS ON CUSTOMER SATISFACTION…
IIDS Lect 3_ Part 1: Growth and innovation
Growth
Ch 11&12
Measures for growth
Perspectives on business growth
Ways to measure growth
Consider following 2 cases:
Firm 1 grows from 5 employees in t to 10 employees in
t+1
(Absolute growth: 5; Relative growth: 100%)
Firm 2 grows from 200 employees in t to 250 employees
in t+1
(Absolute growth: 50; Relative growth: 25%)
Which grows more?
Assessment of which of these two firms grows more depends on whether you look at absolute growth (firm 2 grows more) or relative growth (firm 1 grows more)
Types of growth measures
1. Pecuniary
(sales/turnover, profits, financial ratio’s, income entrepreneur)
2. Employment
Dyson growth strategy slide 8-9
Types of growth measures continued
3. Market share:
% of industry or market’s total sales earned by a specific firm over a specified time period
Indicates growth in acceptance of product in the market
4. Growth intentions or ambitions e.g.,:
Global Entrepreneurship Monitor question to
entrepreneurs: “Not counting owners, how many people, including both present and future employees, will be working for this business five years from now?”
Critique: does not measure actual growth
However, intentions predict actual growth
5. Subjective
Satisfaction of owner with performance of business
Customer satisfaction (for example net promotor score)
FOCUS ON CUSTOMER SATISFACTION (NET PROMOTOR SCORES): COOLBLUE
See slides 13- 19/44
control entire delivery slide 17
Every product has own unique customer journey slide 16
customer satisfaction : Measure customer's willingess to recommend them to others, via
Net Promotor Score (NPS)
Growth rates slide 19
TYPES OF GROWTH MEASURES (CONTINUED)
6. Multiple (construct or index)
Based on a number of indicators instead of one.
Often used at more aggregate levels (region or country) e.g., The Kaufman index of growth entrepreneurship (reflects entrepreneurial business growth based on
Rate of Startup Growth, Share of Scaleups and High-Growth Company Density).
SEE APPENDIX slide 21/44