Organic growth- 3.9.1 Flashcards

1
Q

Define organic growth.

A

Expansion within business.

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2
Q

Examples of organic growth.

A

New product launches.
Existing products into international markets.
Opening new business locations.
Investing in production capacity/ new tech allow increased output, sales volume.

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3
Q

Benefits of organic growth.

A

Less risk than external growth (takeovers).
Financed through internal funds (retained profits).
Allow growth at sensible rate.

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4
Q

Drawbacks of organic growth.

A

Growth achieved dependent on market growth.
Hard to build market share if business already leader.
Slow growth- shareholders prefer rapid growth.
Franchises hard to manage effectively.

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