Methods of Business Growth: Organic and External Growth Explained

The video explores business growth, focusing on organic and external methods. Organic growth involves expanding from within, using resources like reinvested profits. External growth includes mergers and takeovers, allowing quick market expansion. Examples like McDonald's and Apple illustrate these concepts. Challenges of growth, such as slow progress and competition, are discussed. The video concludes with a preview of financing growth.

Why do businesses need to grow?

• To keep up with market demands

• To reduce their market share

• To satisfy their own egos

• To decrease their profits

What is organic growth?

• Expansion through mergers

• Entering new international markets

• Growth from within the business

• Acquiring other companies

Which of the following is an example of organic growth?

• Facebook acquiring WhatsApp

• A company merging with a competitor

• Domino's Pizza opening more stores

• Apple buying Beats

What is the benefit of learning by doing in business growth?

• It requires no experience

• It eliminates competition

• It guarantees immediate success

• It reduces the cost of expansion

What is a major challenge of organic growth?

• It leads to immediate profit

• It requires external funding

• It is often imitated by rivals

• It is too fast

What is a merger?

• A business expanding its product line

• A company selling its shares

• Two companies combining into one

• A company buying its supplier

How does external growth differ from organic growth?

• It focuses on improving existing products

• It often involves mergers and acquisitions

• It involves internal resources

• It is slower and more gradual

What is vertical integration?

• Merging with a rival

• Buying a company in the supply chain

• Expanding product range

• Acquiring a competitor

Which company is known for frequent acquisitions?

• Apple

• Lidl

• Starbucks

• McDonald's

What is a potential risk of a takeover?

• No need for due diligence

• Immediate market dominance

• Overpaying for the acquired company

• Guaranteed success