Organic growth happens when business expands their operations by themselves and not by acquisition or mergers.
Advantages:
– Can spread the cost
– No cultural clashes or control issues
– Can be set up in many ways – for example, through a new division
– May get access to government grants
– Easier to terminate
– Can be developed slowly (less risk)
Disadvantages:
– Lack of experience in new areas
– Less attractive to finance providers
– There may be barriers to organic entry
– It may be too slow
– No access to skills, reputation etc. or other strategic capabilities required for success
– Managers may be spread too thinly
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