According to Growing a company by international acquisition (n.d.) there are two major ways of growing a business: organic or inorganic. The decision which one is the best solution for a given company depends on the market, trends and the resources of the company. In most cases organic growth is constant and an ongoing process while the inorganic growth happens when the company decides to widen its options. Organic growth happens when a company is using its own resources, opportunities and advantages to improve profitability. Usually this happens by one or more combined: - Expanding sales (inbound, outbound) activities to reach more customers - New product launch to increase market share - Marketing activities
Organic growth simply means that a company increases the turnover of its existing business by having more customers to patronize its products. For a company with an organic growth, it means the company has to increase sales to its existing customers, improve the product’s quality and encourage new customers to use its products and services (Hatton, 2016). So, organic growth expands a business profitability from the inside while inorganic growth expands the business profitability from the outside (Hatton, 2016; The Times 100,
Many companies hope to grow and expand into new broader markets where they can compete with the top companies in the industry of interest. However, every such company has to be ready to commit and follow a growth strategy for the growth of the company over time. A company can either grow in an organic or inorganic manner. Organic growth is where a business expands through increasing the amount of output, increasing sales, development and release of new products, and expansion of the customer base being served by their products, and therefore, improving profitability of the business. On the other hand, inorganic growth is where a business expands through acquisitions, mergers, or takeovers.
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.
By simply increasing output and driving sales is one method of attaining organic growth. This method, however, relies heavily on the overall performance of a company’s core businesses and takes time. The second approach, the inorganic growth, is to look for another strategic player from
Organic growth is a strategy where an enterprise develops by making use of its current business base and leverage. Under this growth factor an organization leverages on its current markets and business strength to grow. An example is perhaps when a national brewer decides
The second advantage is it can allow companies to expand their business internationally. Meaning, they can open up more branch in multiple locations in local, regional or domestic economy markets. In business wise, organization structure help business owners manage their sub-company with ease. It allow them to create a management chain to ensure all business from multiple location operation according to the main company standard procedure. Opening a sub-company and managing it is not that easy especially international company where the leader may not be able to visit the company every time.
Market Development focuses on increasing the sales for an existent product by introducing it into new markets. This strategy is often used by the companies which plan to expand globally, by adding new characteristics to the existing products, according to the consumer’s needs. Big companies like Addidas and Nike followed the market development strategy to expand internationally by offering the same product. 4. Diversifying strategy focus on the development of the business by introducing new products to the new markets.
They often rely on powerful distributors (hypermarkets, supermarkets, convenience stores, independent proximity stores…) as well as smaller sub-channels such as restaurants, businesses, schools, hotels, vending machines etc While these channels have become standard and unavoidable, especially in developed countries, they have reached in the past decade a certain maturity and companies often look for new growth levers in order to stay competitive. As a result, companies are always seeking for new profitable and innovative ways to distribute their products to the consumers. One of the most innovative business model in that sense is the direct-to-consumer (DTC) model, which aims to generates additional sales (on top of the existing channels) and create a proximity with the consumers by distributing the products directly, without resorting to the usual intermediaries. The direct-to-consumer has known a real boom in the past years, thanks to the Internet and the rise of e-commerce. But how do these companies, relying strongly on distributor giants such as Carrefour, Walmart and Tesco, adapt to this new trend ?