Case Study : Growing A Company By International Acquisition

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Written Assignment Unit 7 Case study: Growing a Company by International Acquisition Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing. When a company is starting or expanding internationally it can develop by inorganic growth or organic growth. An inorganic growth refers to the growth of the company by merging with other companies or by the takeover. This type of growth provides with an existing customer base, channels of distribution, and access to new markets. When companies merge, they share resources and knowledge. On the other hand, when a company takes over another company, it buys its shares and takes control of the management and decides with activities to keep. Though,…show more content…
For Davis Service Group, setting up a new company in Europe would have caused rivalry with Derendsen. Instead, The Group would build on Berendsen’s local experience and local market contacts. Moreover, the Group had expertise in textile service and an annual turnover of £820 million which is a great resource to expand into other geographical areas. The Group also oversaw the cultural differences, language barriers, and currency exchanges. In this case, all these difficulties would be overcome easily since people in those countries had cultural similarities and buying patterns to the UK, the business would be conducted in English, and the currency would be the Euro. The acquisition of Berendsen gave Davis Service Group the control to reduce operating costs, strengthen managements, and save fixed costs. What aspects of European Union markets have particularly encouraged horizontal growth of the Davis Service Group? The aspects that have encouraged horizontal growth of the Davis Service Group is that the integration provides with a larger customer base, both businesses operate in the same business sector, and enables economies of scale. Davis Service Group took over Sunlight and Berendsen because these were specialist firms at the same stage of production in the same industry. What aspects of European Union markets have particularly encouraged organic as opposed to inorganic growth? The aspects
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