Forms of Business Growth: Organic and External Growth Explained

The video tutorial discusses the two main forms of business growth: organic and external. Organic growth, also known as internal growth, occurs when a business expands through its own efforts, such as increasing production or opening new stores. This form of growth is exemplified by companies like KFC and Domino's Pizza. However, it comes with challenges, such as the time required and potential market changes. External growth involves mergers, takeovers, and integration with other companies, aiming to increase scale and efficiency. This approach also faces challenges, including costs and potential cultural clashes.

What is organic growth in a business context?

• Growth through internal expansion

• Growth through mergers and acquisitions

• Growth by reducing costs

• Growth by increasing prices

Which of the following is an example of organic growth?

• A company reducing its workforce

• A company opening new stores

• A company acquiring another company

• A company increasing its product prices

What is a potential drawback of organic growth?

• It is usually very quick

• It can lead to cultural clashes

• It often requires regulatory approval

• It may take a long time to realize benefits

What is external growth?

• Growth through third-party companies

• Growth by increasing prices

• Growth through internal expansion

• Growth by reducing costs

Which of the following is a form of external growth?

• Increasing marketing efforts

• Merging with another company

• Launching a new product

• Opening new stores

What is vertical integration?

• Expanding into new markets

• Merging with a supplier or distributor

• Reducing operational costs

• Merging with a competitor

What is a potential issue with integration in external growth?

• It is always successful

• It can lead to cultural clashes

• It requires no investment

• It is faster than organic growth