Organic growth- 3.9.1

Question 1

Define organic growth.

Answer 1

Expansion within business.

Question 2

Examples of organic growth.

Answer 2

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

Question 3

Benefits of organic growth.

Answer 3

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

Question 4

Drawbacks of organic growth.

Answer 4

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.