Categorizing the Growth Strategies of Small Firms

Abstract

This study investigates the link between a small firm’s investment in R&D and its growth strategy. A firm’s growth strategy refers to the means by which the organization plans to achieve its objective to grow in volume and turnover. We categorize firm growth strategies into eight distinctive clusters: opportunity explorers, radical innovators, business developers, business expanders, profit makers, business rebuilders, stagnators, and downsizers. We argue that understanding a firm’s growth orientation provides a way to assess the returns of its R&D investments, because an organization’s intangible growth strategies and tangible inputs are connected.