3 - Growth and Survival

Summary

Introduction

What, then, are the general patterns that explain the independent survival and growth of multinational firms in the global alcoholic beverages industry since 1960? The term growth is used to mean “increase in size as a result of a process of development” either organically or through merger and acquisition, and “size is a by-product of the process of growth.” Survival is used to mean the maintenance of the firm's autonomy of action. In this respect, nonsurvivals or “exits” include firms that have either been liquidated, dissolved, discontinued, or absorbed, as well as firms that were merged or acquired by other firms, even if they were able to retain their corporate identity and continuity of existence for a significant period of time.

Two questions are being asked: What principles will determine firm growth? How fast and for how long can they grow? The next section examines the main determinants in the growth and survival of firms, giving some examples to illustrate their changing relevance over time. The following section provides a general framework to explain the different patterns of growth and survival, illustrating each of these patterns with some examples. The final section provides a summary of the preliminary findings that are analyzed in more detail in the following chapters.

Determinants

Although there is no “secret recipe” that explains survival and sustained growth, it is possible to monitor the evolution of firms by making systematic comparisons between the largest multinationals from different countries and assessing the type of relationship, such as cooperation and competition, they established among themselves.