Sources Of Growth

When a company grows, the growth may be either organic or inorganic. Organic growth means that the company itself has grown from its own business activity, while inorganic growth means that the company has grown by merger or take-over. Organic growth is also sometimes known as internal growth and inorganic as external growth.

Companies may want to grow for various reasons:

• To gain economies of scale
• To spread risk - diversification can often help spread risk
• To gain market share
• To increase profits and therefore returns for shareholders