Growth

Organic Growth

Also known as internal growth

Involves expansion from within a business e.g. expanding product range 

Builds on business' own resources and capabilties

Most business' only use this expansion method

Organic Growth Strategies

  • New Product Range
  • Exporting Internationally
  • Open New Business Locations (domestic or overseas)
  • Invest in additional production capacity or new technology to increase output and sales

Examples of business' that have grown organically:

  • Apple
  • Dominos
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Benefits and Drawbacks of Organic Growth

Benefits

- Less risk than external growth (e.g. takeovers)

- Financed through internal funds (e.g. retained profits)

- Builds on business' strengths (e.g. brand image)

- Business can grow at a more sensible rate 

Drawbacks 

- Growth may be dependent on the whole market

- Hard to build market share if the business is already a market leader

- Slow growth (shareholders prefere more rapid growth)

- If its a franchise, it can be hard to manage effectively

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