Advantages and Disadvantages of Organic Growth over External Growth


	Advantages and Disadvantages of Organic Growth over External Growth
	Advantages Can maintain current management style, culture and ethics Less risk - expanding what the business is good at Usually financed using profits so less risk Easy for the business to manage internal growth Easy to control how much the business will grow Less disruptive changes mean workers' efficiency, productivity & morale remain high	Disadvantages 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
	Evaluation

Can maintain current management style, culture and ethics
Less risk - expanding what the business is good at
Usually financed using profits so less risk
Easy for the business to manage internal growth
Easy to control how much the business will grow
Less disruptive changes mean workers' efficiency, productivity & morale remain high

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

Get Revising