Two Ways Of Growth

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1. Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing.
The study text clearly outlined two major ways of growth, viz: The organic growth and the inorganic growth.
a. Organic Growth: is an expansion strategy whereby demand for existing business is increased through strategies that create an increase in the market demand for the existing product or a new market in the same or different geographical region. Some companies capitalize on various macro-economic indicators in different countries to expand their existing products or services. Also, favorable treaties, legislation or agreements between or among nations can also give existing companies opportunity to expand into other countries
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Many companies, therefore, take advantage to seek an oversea presence in these countries. For instance, Globacom, third largest Telecommunication Company in Nigeria, expand to some of these countries and saw a magnificent expansion in its business. Anther practical example is the Eco Transnational Incorporation (ETI), an Africa Financial service company with headquarter in Nigeria, took advantage of several trade relations between Nigeria and other Africa countries to establish an oversea presence without much difficulties. The rate of organic growth is quite easy to control when compared to inorganic growth. This is because organic growth is within the same managerial control. Relevant information about associated risk can easily be calculated and mitigated unlike the inorganic growth, especially acquisition, where acquired subsidiary may be risky in substance without the knowledge of the acquirer/acquiring company. So, many companies tend to minimize risk and mostly prefer to grow through the organic process. Although, the process…show more content…
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 Group.
According to the text, Davis Service Group acquired Berendsen in 2002, when the company’s performance was quite poor. Davis group quickly capitalized on the weakness of Berendsen and its own strength of managerial capability to take over Berendsen. It was really a good opportunity for the Davis Service Group as the company was able to achieve greater presence in oversea countries, capitalize on Berendsen customer local experience and utilize its local market strength to grow outside the United Kingdom. Rather than merging with Berendsen, Davis group completely took over the control of the company so as to set up a sound system that led to a success. The Davis group effectively cut cost by reducing operating cost and fixed overheads, strengthen the management team and put the company in a better and stronger position to improve sales and

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