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The Benefits Of Inorganic Growth And Global Growth

Satisfactory Essays

1. Describe two major ways in which a company can grow. Give examples to illustrate the two ways of growing.
Two major ways in which a company can grow are organic and inorganic growth.
Inorganic Growth involves growing thru mergers and acquisitions. This can be done internationally or domestically, but nonetheless, it involves the growth generated by buying a new company, a new branch, or a new brand (Johnston, 2017). As an example, if McDonald's acquired a competitor, such as Burger King, it will equal instant growth for a firm. It would have a new restaurant, new brands, and a much bigger market share.
As any business transaction, there are advantages and disadvantages. Some advantages of inorganic growth include increased market …show more content…

Explain how the acquisition of Berendsen provided such a good opportunity for the Davis Service Group.
Berendsen was a leader in its market area in the textile maintenance sector. Not only was the company a leader in its market, it also provided services outside their area. The company generated over $820 million in annual sales. It had a strong market presence and great relationships with its customers. The Davis group would immediately benefit from the revenue, market knowledge, a knowledgeable management group, and a proven track record within its industry. This acquisition was a great opportunity for the Davis group.
3.- What aspects of European Union markets have particularly encouraged the horizontal growth of the Davis Service Group? What aspects of European Union markets have particularly encouraged organic as opposed to inorganic growth?
Horizontal growth is defined as the point in which two companies are in the same stage in terms of production. The Davis service group owned Sunlight, a textile maintenance company. The Berendsen and Sunlight were companies that were using organic growth. Both companies were market leaders and were at the same point in production. Joining both these companies would immediately increase sales, market share, as well as the customer base. Economies of scales would have helped both firms since the cost of production would decrease due to increase production, which would generate savings

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