ORGANIC GROWTH Flashcards
When does organic growth occur
Organic growth occurs when an organisation increases their sales through expanding the scope of their internal operations.
What can organic growth include
Expanding the current asset base (buying new factories or premises from where to operate)
Increase the product range
Employing more staff
Entering new international markets
Franchising
How could organic growth be funded
It could be funded through the use of retained profits, new shares issues, or loan capital
When does external growth occur
External growth occurs when an organisation increases their sales through integrating with other businesses.
What can external growth include
Mergers
Takeovers
Strategic alliances and joint ventures
How is external growth often finded
They are often funded through external sources of finance
What are the pros of organic growth
Organic growth tends to be more controlled than external growth
Ability to maintain culture, managing style, brand image and USP
Potentially les risk than external growth
Maybe associated with higher worker moreale than external growth
What are the cons of organic growth
Can be slower than external growth
Risk of missing out on opportunities in fast growing markets
