Internal and External growth


Internal and External growth

Internal growth

Internal growth occurs when a business expands by:

  • Increasing the number of goods it can produce, for example by buying more or better machinery.
  • Developing new products
  • Finding new markets for their products

Although internal growth is often quite slow, it avoids some of the problems of external growth.

External Growth

External growth takes place when a business merges with or takes over another business in the same or different industry. The process is know as intergration. 



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