3.2.3 Organic growth 🌱

Question 1

What is organic growth?

Answer 1

When you grow the business from within and without a merger or take over

Question 2

What is inorganic growth?

Answer 2

When a business has grown by buying its way into the larger Through takeovers and mergers

Question 3

What are the five methods of growing organically?

Answer 3

Launching new products

opening new stores 

Expanding into foreign markets

Expanding worker force 

Franchising

Question 4

What is Franchising?

Answer 4

when the franchisor grants a license to franchisee or another business allowing them to trade using the brand/ business format 

Question 5

What are the advantages and disadvantages of franchising

Answer 5

Advantages

reduces the capital needed to open stores

Gains better geographical location of business - gain franchisee local knowledge

rapid method of growth 

Negative

don’t get all the revenue for growth

Lose all control over growth 

Question 6

What are the positives and negatives of organic growth?

Answer 6

Positives -
The pace of growth is manageable

Less risky as growth is financed by profits and there is expertise in the industry

Avoids diseconomies of scale

The management knows & understands every part of the business

Negatives -

The pace of growth can be slow and frustrating

Not necessarily able to benefit from economies of scale

Access to finance may be limited