Organic Growth

Question 1

What is organic growth?

Answer 1

Means the business has grown from within

Question 2

How does organic growth occur?

Answer 2

Developing new products which is called new product development

Question 3

What are examples of how businesses can grow within new markets?

Answer 3

• expanding overseas
• changing the marketing mix
• taking advantage of new technology

Question 4

What are the advantages of organic growth?

Answer 4

• businesses can keep their company culture
• higher production let’s the business benefit from economies of scale and lower average costs
• more market share and the business can set prices for the industry as they have more influence

Question 5

What are the disadvantages of organic growth?

Answer 5

• very high risk strategy, opening lots of stores or taking new staff is very risky
• long period between investment and return on investment
• growth may be limited and is dependent on reliability of sales forecasts