CHAPTER 3Expansion Strategy: Value in Revenue Growth

You can’t shrink to greatness.

—Grow to be Great1

Revenue growth remains a key driver of strategy for most companies despite the challenges it brings. To be sure, bigger is not necessarily better, as the bankruptcies of titans have taught us in recent years. Yet growth in revenues does tend to be associated over time with growth in value—measured as returns to shareholders. In Grow to be Great: Breaking the Downsizing Cycle,2 authors Dwight Gertz and João Baptista foresaw the limits of profit improvement without growth. When the book was written in the mid-1990s, many American corporations were obsessed with cost cutting to improve profits and boost stock performance. However, they were not ...

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