organic growth
- Created by: amandiewhitie
- Created on: 12-08-22 04:14
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- Organic Growth
- what is the difference between organic and inorganic growth?
- organic growth comes from within the business either from rising customer demand or from the business launching new successful products or outlets
- inorganic growth comes from outisde the business, either from mergere or takeovers.
- one example would be Facebook buying WhatsApp. Instead of developing their own rival product and competing in the market with already established and successful Whatsapp, Facebook took the easier [but more expensive] route of buying the business, its products and already existing 450 million customers.
- normally, inorganic growth is the path taken by business that are weak in innovation but in this case, Facebook's Mark Zuckerberg claimed that WhatsApp was just a great strategic fit
- methods of growing organically
- good working conditons for employees
- innovation, finding ways to improve products
- advantages of organic growth
- less risk - expanding what the business is good at
- less risk - usually financed by the company's won profits
- still able to maintain current management style, ethics and culture.
- Less disruptive changes mean workers' efficiency, productivity & morale remain high
- Easy for the business to manage internal growth
- disadvantages of organic growth
- Can take a long time to grow internally
- Can take a while for the business to adapt to big changes in the market
- Market size not affected by organic growth
- If market not growing, business is restricted to increasing its market share or finding a new market to sell products to
- Businesses might miss out on opportunities for more ambitious growth by only growing internally
- what is the difference between organic and inorganic growth?
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