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. By joining their forces, by sharing their resources and ideas and by taking advantages of the structures and customers each of them already has, a plan was put in place and the group could see the profits increase. Another example of organic growth for any company is by promoting their products through marketing advertising which will increase their brand awareness and bring new sales.
The company is growing at its own pace that the management is comfortable with. By growing naturally the company usually doesn’t face the cultural or integration challenges that often happens in inorganic growth. By growing naturally the company keeps its own identity (Juneja, n. d.). Disadvantages of organic growth are that the company may stretch its resources and capital too thin so it is fundamental to effectively manage the organic growth and keep the pace that is manageable (Kuntz,
Organic growth for an existing business is consist of enhancing new customers and new sales in order to increase profit. Example: a great example of organic growth is Apple Inc. trend-setting product innovation such as iMac or iPod is reasons of apple growth which caused in their increment of market share and annual turnover. Inorganic growth: can be referred to a situation in which two companies join either by takeover or agreement where one of these firms will purchase at least 51% of the shares of another company. By this act, the company in which has the greater share is in control of the business and is capable of deciding about the activities of firms. Example: a great example of inorganic growth is Microsoft, because, since 1986, they successfully completed about 100 mergers.
An example of inorganic growth was Bibby Line Group 's acquisition of Garic Ltd in 2008. Garic is a plant and equipment hiring company to the construction industry. A merger usually involves combining two companies into a single larger company. The combination of the two companies involves a transfer of ownership, either through a stock swap or a cash payment between the two companies. In practice, both companies surrender their stock and issue new stock as a new company.
External expansion strategies are now hitherto an integral part of the globalization and internationalization movement by enterprises. Foreign markets are now contributing to significant growth paths of businesses in terms of their bottom line. Innovation and best practices are now easier to capitalize or access through simply acquiring foreign operations of relevant companies to their business. There are two ways in which a company can growth namely organic and inorganic. Organic growth is a strategy where an enterprise develops by making use of its current business base and leverage.
6. “New industry structure”: To achieving growth of company, company can acquiring or merge with other company and gain faster growth. Zealong also adapt to new industry structure to achieving faster growth. Zealong has to merge and join with those company who already have good reputed and well known in there counties. By doing this company can easily increase their sales and growth.
The main problem is this: organic food became mainstream because of the millennials, and now Whole Foods have to face some very important and mass-market competitors. These mass-market retailers sold more than 53.3% of organic food in 2015 (Organic trade association). Latest research conducted by Organic trade association in May this year showed that organic food sales takes up 5.3% of total food sales in USA. Comparing to the last year, organic food sales increased by 8.4% or $33 billion (Figure 1). Figure 1 USA Organic Sales Growth Another reason is that, when Whole Foods was formed, there was no competition at all, and nowadays there is a lot of competition, because mass retailers had to adapt to new consumer trends as this one.
The revised stages of organizational growth in relation to information technology proposed by Sutherland and Galliers (1991) are mentioned below: Stage one Adhocracy: It is at this stage that all companies growth began. This stage describes the uncontrolled, specific use of IT that are usually common with start-up companies. The only strategy at this stage is to get hardware and software. Acquisition of IT staff and enhancement of IT skills throughout the organization are generally disregarded here by management but instead outsourced it to external suppliers by the CEO to supply standard packages and develop specific applications with little consideration on how the IT can affect the organization nor the appropriate infrastructure to manage
The main advantage of internal growth for companies in general is that the company grows within the existing structure, so there will be no problems of structure or management systems. The other main type of business development, which Coca-Cola experienced after some time, is external development. The difference between external development and internal development is external development happens
This indicates that company’s operations are becoming capital intensive as it is growing on its expansion path. On the other hand, it has witness declining tax rate due to which there is an increase in Net Income. • Company has posted good consistent profit growth of 26.8% over last 5 years and has achieved highest ever-quarterly Net sales of INR 104.25 crores, registering a growth rate of 32.9%. Company has achieved ROE of 18% over last 5 years. Moreover, company has rewarded shareholders by paying regular dividends and had announced interim dividend at 35% in current year.