Organic growth- 3.9.1 Flashcards
1
Q
Define organic growth.
A
Expansion within business.
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.
3
Q
Benefits of organic growth.
A
Less risk than external growth (takeovers).
Financed through internal funds (retained profits).
Allow growth at sensible rate.
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.