Organic Vs Inorganic

September 26, 2018

 

by Kuldeep Singh

Growth Strategy

Growth strategy  -

Organic  Vs Inorganic

In traditional business,  growth  is a prime objective of Marketing  and Management. There are broadly two strategies  of doing it,

FIRSTLY growth  done Naturally , which is the growth driven with the internal  strengths of the business and its resources.  Optimum use of the business strengths like robust management, Uniqueness of Products  and  Resources, can drive this natural growth, which is often termed as ORGANIC Growth.

SECONDLY ,  growth done through  secondary / external  means,  like mergers or acquisitions, and often termed as INORGANIC Growth.

In order to have a clear understanding of the differences, let’s try to tabulate the points, ( by saying business I mean company )

Organic Growth	Inorganic Growth
Suited to small Businesses	Suited to Bigger businesses
Low capital requirements, internal accruals help fund organic growth.	High Capital is required, External funding could be required.
Low Risk, due to lower debt exposure.	High risk, as external debt exposure increases due to high capital involvement.
Helps Business to have strong foothold in its core area of activity.	Economy of scale helps business to have wider market / area of consumer Reach / coverage
Business is well equipped to adjust for any swift changes in the market situations.	Business is slow to react to any changes in the market situations.
Helps to have loyal customer base.	Helps to increase reach to wider customer base.
Growth is slow	Growth is rapid
The control can be highly centralized.	Here the Control is widely decentralized.
High Competition may result to  business closure	Helps take competition head on.

Traditional  businesses are now having a new environment which is effecting the business growths in a big way – SOCIAL MEDIA.  In order to have foothold  in new fast expanding environment, marketing as evolved  into an offshoot – DIGITAL MARKETING, which further has  its own strategies  in ORGANIC DIGITAL MARKETING  and  INORGANIC  DIGITAL MARKETING.

Read in  next post - Tactics of Digital Marketing