External (inorganic) growth

• Business growth


  Enables businesses to increase the scale of their operation and competitiveness
• Internal (organic) growth


  • Growth achieved through the business's own resources and activities
• External (inorganic) growth


  • Growth achieved through mergers, acquisitions or joint ventures with other businesses
• Merger


  Two businesses join to form a new (but larger) business
• Takeover


  An existing business expands by buying more than half the shares of another business
• Horizontal integration


  • Two competitors join through a merger or takeover, increasing competitiveness and market share
• Forward vertical integration


  • A business takes control of another that operates at a later stage in the supply chain
• Backward vertical integration


  • A business takes control of a business earlier in the supply chain
• Conglomerate integration


  • Businesses in unrelated markets join through a takeover or merger, enabling them to spread risk
• External (inorganic) growth usually involves a merger or takeover
• External growth (inorganic growth) enables businesses to increase the scale of their operation and competitiveness