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Types of business growth (Organic/External)

Types of growth 

Organic (aka internal) 

e.g. UnderArmour/LEGO 

Organic growth is growth from within a business - no other companies are involved. Done by expanding operations. This is the most common type of growth, as most firms are small or medium-sized, so don't have the resources necessary for external growth. 

Can be done in various ways: 
through advertising and reaching out to more consumers, hence building customer base
by expanding into new markets/introducing new products
expanding existing production through investment in capital 

Advantages: 

Cheaper, more cost-effective. 
Easier and less complicated. 
Less risky. 

Disadvantages:

Growth usually takes a long time. 
It is hard to expand internationally without making acquisitions as different countries have different legal rules, etc. This could also hold true for expanding into different markets. 

External 

e.g. Google acquiring Motorola/Amazon buying Twitch 

This is growth involving other companies. Can be done one of two ways: 

1. Merger

Combining two previously separate businesses into one business. 

2. Takeover 

When one business literally buys or takes over another. 

Advantages: 

Faster growth. 
Easier diversification into new markets if a company acquires another already in that market. The knowledge is then already there for them. 
Easier to expand internationally by acquiring a company in that country - increase presence in faster-growing countries. 
Disadvantages:

Risky 
Initially expensive to acquire other companies. 
May also be complicated. 
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