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Organic (Internal) Growth - Coggle Diagram
Organic (Internal) Growth
Organic (or internal) growth involves expansion from within a business, for example by expanding the product range, or number of business units and location.
Organic growth builds on the business’ own capabilities and resources. For most businesses, this is the only expansion method used.
Strategies:
Developing new product ranges
Launching existing products directly into new international markets (e.g. exporting)
Opening new business locations – either in the domestic market or overseas
Investing in additional production capacity or new technology to allow increased output and sales volumes
examples of businesses that have implemented successful organic growth
Apple
Costa Coffee
Dominos UK
benefits
Less risk than external growth (e.g. takeovers)
Can be financed through internal funds (e.g. retained profits)
Builds on a business’ strengths (e.g. brands, customers)
Allows the business to grow at a more sensible rate
drawbacks
Growth achieved may be dependent on the growth of the overall market
Hard to build market share if business is already a leader
Slow growth – shareholders may prefer more rapid growth
Franchises (if used) can be hard to manage effectively
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