Inorganic Growth Strategy

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In this world in constant development and with the globalization trend, businesses have faced the need to expand or become stagnant. With globalization, businesses have the opportunity to carry out this expansion outside their country borders. Businesses have become aware of the huge growth opportunities they can find abroad, but they have also learned that in order to benefit from these opportunities they need to carefully plan an expansion strategy. Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing There are two strategies that companies can follow in order to grow: organic growth strategy or inorganic growth strategy. Organic growth is the growth that originates from within the company.…show more content…
A successful example of a horizontal integration was Glaxo Wellcome and SmithKline Beecham which became GlaxoSmithKline back in the year 2000. With this merger, they became the largest drug company in the world. At the time of the merger, they were both successful pharmaceutical companies that were at the same stage of production and with the same objective of providing medicines to fight some of the biggest diseases around the world (Blake, 2012), so if they were both trying to achieve the same goal, it made sense that they combined their efforts in a more effective way. Businesses grow when they have the resources to expand and opportunities exist for growth. Explain how the acquisition of Berendsen provided such a good opportunity for the Davis Service…show more content…
What aspects of European Union markets have particularly encouraged organic as opposed to inorganic growth? The European Union encouraged horizontal growth of the Davis Service Group because the usual barriers to international growth, i.e., language, culture, and currency, did not pose a problem for them as, first, English was used by Berendsen as a common language across all European countries it operated in; second, the cultures of the countries where Berendsen operates are similar to the culture of the UK; and third, the currency of the countries where Berendsen operates is the euro or a currency linked to the Euro. The European Union has established rules to allow international and cross-border mergers of companies. European Union markets particularly encourages organic as opposed to inorganic growth as the European Union is made up of 27 countries. This results in a potential market of over 500 million customers. It is the largest single market in the world (NiBusinessInfo, 2016), which has led to many benefits to foreign investors. There is free flow between the countries of the EU, fast transport links have been developed, and measures have been introduced to harmonize company law across Europe, although there are specific start-up rules for each member state of the
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