education

2. Internal growth
 In this topic you will
learn about :
1- What we means by
internal growth ?
2- Benefits and
drawbacks of organic growth
3- How a corporation do
this type of growth ?

3. What’s it ?
 Internal growth ,or
organic growth refers to
explanding the business
and using the resources
and capabilities of its own
internal. The company
uses highter sales and
profits to reinvest in the
business.

4. Benefits of organic growth
Less risk than
external growth
(e.g take over)
Can be financed
through internal
funds (e.g
retainds profits)
Builds on a
business strengths
(e.g brands
,customers)
Allows the
business to grow
at a more sensible
rate

5. Drawbacks of internal growth
Growth achieved may be dependant 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

6. How to do it ?
Increasing the
number and
quality of
employees
make the
output bigger
Opening new
outlets,
factories or
branch offices
Investing in
research and
development

7. Strategies of internal growth
Developpement new product
ranges
Opening new business
locations _either in the
domestic markets or
overseas
Investing in additional
production capacity or new
technology to allow
increases output and sales
volumes
Launching existing products
directly into new
international markets e;g
exportation