They increase their revenue and invested on purchasing properties and increase their product. A good example of inorganic company growing is when Nokia and Microsoft merge together for better customer base and new channels of distribution that resulted in increased growth. The advantages and disadvantages of organic and inorganic growth One of the advantages of organic growth is having strong managements that implements effective planning on expansion of the company. The managements know well how the business operates in the marketplace. However, in organic growth, there is always limited resource since the business runs in the same marketplace.
This essay focuses on the growth of a company. It will examine the case study of “Davis Service Group” which acquired Berendsen a business in the same textile maintenance services as them (Davis Case Study, n.d.). For any level of growth to occur businesses and their staff must be willing to embrace change. In the case of international expansion, the market must first ensure that its home base operations are strong enough and that the industry has achieved a level of maturity, only, then should the company consider expanding and acquiring business operating outside their borders. There are two significant ways by which a company can grow organic growth and inorganic growth.
The two major ways in which a company can grow Successful companies continue to seek better profitability for their investors. There are two major ways in which a company can grow – Organic and Inorganic. Organic growth – this is when a company increase its revenue by simply improving its internal capabilities. As marketing and operations become efficient, the company will generate more revenue and ensures growth. By positioning a business as market leader, turnover can increase rapidly and Davis Service Group made use of Organic growth.
Also, the internal structure of Alibaba viz its division in 1688.com, Taobao.com, Tmall.com,Aliexpress.com etc help in efficient operations, as well as cost reduction since this, helps them to serve specific segments of customers. Alibaba – Going Global In order for its sustained growth, Alibaba is increasing its reach of operations. It is expanding into Asia Pacific region, Americas, and Europe. The customers of these regions have different demands. Hence Alibaba has taken following steps to help its global growth: a.
1. Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing. The two major ways in which a company can grow are:- • Organic growth • Inorganic growth Organic growth: In business, Organic Growth can be referred to expanding the business of a company via utilizing its owns assets and resources. Organic growth for an existing business is consist of enhancing new customers and new sales in order to increase profit.
And in the case study provided we have the solution to this questions. Now, the two major ways in which a company can grow and develop are through: 1) organic growth, 2) inorganic growth. On one side we have "the organic growth which is done by increasing turnover of existing business and on the other side we have the inorganic growth that is done by the acquisition of another business" (Davis Service Group, 2008, p.2). In other words, the organic growth is done internally by increasing the production, customers, sales, and profits, instead, the inorganic growth is done with the help of other companies, by making a joint venture with other companies. Example of organic growth in our case is represented by the Sunlight and Berendsen company, two of the group companies which were able to learn one from the other and increase their customers in the places each of them already perform.
STRATEGIES Between 1946 and 2003, HSBC used acquisition-based strategy. And since 2003, their strategy is based on managing for growth business. The new strategy focused on driving organic revenue growth especially in the Emerging Markets, and continued cost containment. Today, this focus on Emerging Markets creates a need for leaders who understand both local business context and global strategy. From an organizational development perspective, one way to achieve continuity around core values and create global alignment with business strategy is to fully leverage human capital within the organization.
Product development Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on: • Research & development and innovation • Detailed insights into customer needs (and how they
Expanding a business is key to increasing revenues and market penetration. There are two ways a company can grow, organic and inorganic growth. Organic growth occurs when a company increases sales and gains new customers utilizing the existing business (Davis - Growing a company by international acquisition, 2008). Organic growth could happen through increased marketing efforts or promotions. For instance, many businesses use online services, such as Groupon or RetailMeNot, to send targeted to promotions to customers in specific areas to drive new or repeat customers into their business.
Advantages of Global Marketing A global marketing strategy can expand the consumer base and improve the company reputations. It just one component of the global business strategy, and should be planned carefully taking into account every aspect of the different markets in the country in which the company hope to do business. The global marketing strategy of the companies must have concrete goals and a clear vision about the strengths and weaknesses present in each overseas market, and how they will deal with them or make them to the company advantage. There are many advantages of global marketing strategy. The first advantage of global marketing strategy is the company will grow and developed faster.