Organic Growth Flashcards

All 6 cards in this deck

Give one benefit of internal (organic) growth.

Any one of: it costs less than buying another business; it is lower risk because the business builds on what it already does well; slower growth makes it easier to keep quality high and train new staff.

What is internal (organic) growth?

When a business grows by expanding its own operations, e.g. launching new products or entering new markets.

Give one drawback of internal (organic) growth.

Any one of: it is slow; the business may lack cash to fund it; it may lack experience in new markets, leading to costly errors.

Name four ways a business can grow organically.

Increasing output, gaining new customers, developing new products and increasing market share.

Give one reason why a business may want to grow.

Any one of: to gain a bigger share of its market; to earn more profit; to reduce competition.

Give one advantage of organic growth over external growth, to do with control.

The owners keep control of the business, e.g. of its culture, systems and direction.