Growth

• Strategic methods refer to the different strategies a business might pursue to achieve its objectives
• Growth is a common objective
• It is important as it shows progress, it creates financial benefits such as higher revenues and lower costs and creates momentum
• Organic growth occurs when a business grows through expanding its own operations, for example it sells more of its existing products or launches new products for customers
• External growth involves growth by joining with other businesses
• External growth can be through:

  • Acquisitions/takeovers, when one business gains a controlling share of another
  • Mergers, this is when one business joins with another and the owners become joint owners of the new business
• Organic Growth

  • slower growth
  • gradual increase in scale
  • easier to manage
  • often will require a lot of investment and commitment
• External Growth

  • over-night change in scale
  • quick increase in the number of employees
  • new management challenges
  • difficulties in joining the two together
  • culture clash