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Difference Between Inorganic Growth And Organic Growth

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The two major ways in which a company can grow are Inorganic growth and Organic growth. Inorganic growth is when a business grows by joining two or more companies together through mergers or takeovers. An inorganic growth is the operations of a business that arises from mergers or takeovers, rather than an increase in the companies own business activity. Firms that choose to grow inorganically can gain access to new markets and fresh ideas that become available through successful mergers and acquisitions. Inorganic growth is seen often as a faster way for a company to grow when compared with organic growth. Microsoft is a clear case of inorganic growth because they have successfully completed more than 100 mergers since 1986. Organic growth is when a company grows by increasing the turnover of the existing businesses. A business can grow in size through Internal growth by hiring more staff and equipment to increase its output, External growth in which a business merges with or takes over another organization. Apple Inc. is probably an excellent example of Organic Growth. Apple’s growth is driven by trend-setting product innovation like Macintosh, iMac, iPod etc. which resulted in their increased annual turnover and market share.

Organic growth shows how well management of a company is utilizing internal resources to increase sales and output. Mergers, acquisitions and takeovers can provide an artificial boost to a company 's sales and revenue figures; this can cloud the

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