Davis Service Group : Organic And Inorganic Growth Of A Company
Describe two major ways in which a company can grow.
There are various ways to grow a company. However, two major ways in which a company can grow is through inorganic and organic growth.
Inorganic growth basically indicates that a company joins another company and become one operating entity. The Inorganic growth process can be achieved through two means: merger and takeover. In a merger, the two companies agree to combine the resources of the two companies so as to focus its operations on areas profitable to the two companies. Additionally, In a takeover, a company chooses to buy the majority shares of another company so that the company with the larger number of shares eventually controls the business activities of the company and assume maximum responsibility for the company’s production (The Times 100, n.d.). So, in general, inorganic growth enables a company merge or buys another company and continues or modifies the activities of the company.
Organic growth is another major way to grow a company. Organic growth simply means that a company increases the turnover of its existing business by having more customers to patronize its products. For a company with an organic growth, it means the company has to increase sales to its existing customers, improve the product’s quality and encourage new customers to use its products and services (Hatton, 2016). So, organic growth expands a business profitability from…