Growing a Company by International Acquisition

881 Words 4 Pages
For growth, businesses should know when and how to introduce change, usually by acquiring business operating over and beyond the borders. That is, at that point where they reach maturity, meaning that they have tackled all the possibilities of growth and there exists no more opportunities where they are currently based.
The two major ways in which a company can grow are:-
• Organic growth
• Inorganic growth
Organic growth comprises of increasing new sales and new customers for the existing business to improve in terms of profit. The company grows within itself and improves its existing affairs, as opposed to inorganic growth which involves expanding the business from outside into other regions or countries. In organic growth, a company
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Its position in the market made integration easy in terms of established networks and customer relationships. By taking over Brendsen Davis Service Group was able to exercise its authority fully by reducing the overall cost of running the business, for example, closing down shops in areas where Brendsen had more than two outlets in the same region, strengthening the management of the two companies, taking care of the fixed costs (the costs that remain unchanged over time), for example, repaying the debts hence cutting out on the interest rates, permanent salary of the closed firms, bills on electricity rent etcetera.
Aspects of the European Union markets that have particularly encouraged horizontal growth of the Davis Service Group includes the fact that the EU has 27 countries under its name, that means, a ready market of over 500million customers who are ready to consume the goods and services proposed to them. That coupled with free flow of goods and services, a fact that has been supported by the infrastructure, the development of the fast trains, low cost airlines etc, as this means that people, goods and services can travel across Europe more easily and faster. The development of internet has also ensured the fast and effective means of communication, top that up with the skilled labour force. In Europe, education standards are very high, the manner in which students are