Study On Growth Management Problem Of Luzhoulaojiao Co. Ltd.

Many cases have proved that growing over or under reasonable rate would bring serious drawbacks to the development of enterprise. In order to ensure a sound development, the enterprise has to put its growth under control. Thus, "Growth Management" has aroused great concern among enterprises and been applied to the practical management gradually. The key of the "Growth Management" is to judge if the enterprise can grow at a moderate speed. In order to judge the enterpriser's growth rate, "Sustainable Growth Rate" (SGR) was put forward and defined as "the highest growth rate of sale provided that the financial resource have not been exhausted". The executives can use the SGR to analyze the status of the enterprise and then change their operational and financial policy. In this way, the company can be avoided going bankrupt because of financial crisis by blind expansion or losing the chance of fast development.Based on the "Growth Management" theory and associated with the sustainable growth model, I make an investigation on the case of the Luzhoulaojiao Co. Ltd by quantitative and qualitative analysis method. Then, I find that the Luzhoulaojiao Corporation's actual growth rate is too high in the year of 2008. For the sake of making the Luzhoulaojiao Corporation's actual growth rate being harmony with its sustainable growth rate, I try to give some suggestions which are based on analyzing the Luzhoulaojiao Corporation's general environment and management strategies. I believe these suggestions can help Luzhoulaojiao Corporation use their resource more rational and make more accurate decisions. This paper can also be used for reference by other companies.