Internal (organic) growth
A business grows when it sells more output over a period of time. Business growth is often an important business objective because it may:
- help to increase market share
- improve profits
- increase revenue
- help a business to open more branches
Business growth can occur in a number of ways:
- from employing more people
- from opening more branches
- from increasing sales or revenue
- from increasing profits
Internal growth, or organic growth, occurs when a business decides to expand its own activities by launching new products and/or entering new markets. Businesses do this in order to improve their chances of increasing their customers, revenues and profits.
New products
Many new businesses start out with one product idea. Once a business has a market it already sells to, it is easier and less risky to expand its product range with related products.
To ensure internal business growth is successful, a business can engage in research and development, which is work directed towards the innovation, introduction and improvement of products and processes.
Business example
An established soft drinks brand or manufacturer might start off selling one cola product. Because of changing tastes, competition and business growth, it might later expand its product portfolio with new drinks, such as vanilla cola, cherry cola, lemon cola and sugar-free cola.
