Organic Growth

• Organic growth is when a business expands using its own resources
• Ansoff’s matrix provides a framework for organic growth strategies
• Franchising can lead to rapid organic growth but carries the risk of damaging the brand

Organic growth refers to a business expanding its existing capacity using its own resources, while inorganic growth involves external growth through mergers or takeovers. Ansoff’s matrix provides a framework for thinking about organic growth strategies, including market penetration, developing new markets, developing new products, and diversification. Opening new production facilities or retail outlets can support organic growth, but over-trading should be avoided. Franchising can lead to rapid organic growth at a lower cost, but there is a risk of franchisees damaging the brand’s reputation. Organic growth carries lower risk and allows for greater control and focus on core competencies. However, it is slower than inorganic growth, which may be necessary in saturated markets. Dominant firms benefit from economies of scale, making it challenging for organically growing firms to compete.