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5 Types of Business growth of an organization

February 20, 2019 By Hitesh Bhasin Filed Under: Business

It is often answered fact that business means growth. Every company seeks growth in one way or the other. Every company has their own strategies by which they can implement growth by increasing their sales and profits. The strategy that the business with used to implement in the market will depend on its financial situation in the market, the competition, and to a large extent on government regulations.

Business means growth and growth are measured in terms of increased profits and increased market share. Every business aspires for growth and they achieve this through either by increased sales or by reducing costs.

Either way, the aim is to increase profits. By increasing sales, the organization can also increase market share and that is why every company aims to increase sales. Following are some common types of business growth that businesses plan.

Table of Contents

  • 1) Organic Business Growth
  • 2) Strategic Business Growth
  • 3) Partnership/Merger/Acquisition
  • 4) Internal business growth
  • 5) Rapid Business Growth

1) Organic Business Growth

This is the most basic type of business growth but is more effective means of growing your business. This type of business growth focuses more on manufacturing increased products and services and space for the success of the business.

The businesses which focus on organic business growth tend to buy larger store or expand shifts in order to get more output of products. The businesses which focus on growing organically should aim to expand in order to accommodate more for their needs. This type of business growth is considered to be very solid for new businesses and also for an existing business is who have typed into the potential of a new market and face shortage of product.

The increase in space or production meets the growing needs of customers and also prevents shortages of the products. Organic business growth is unanimously considered as an unsustainable strategy of growth but one which ultimately helps for the business to succeed in future. If existing products are to be sold to new customers or in new territories the company may have to launch an advertising campaign or expand the sales team.

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On the other hand, if the company decides to use new distribution channels then it is to be ensured that this generates new sales rather than take sales from existing distribution channels. Yet another way to grow the business organically is to sell a new product that increases the product vertical and serve them to the existing customer base.

2) Strategic Business Growth

Type of Business growth - 1

Strategic business growth is the one which focuses on long-term growth of the business. The businesses which focus on strategic growth have reached a peak of the organic business growth stage and are forced to find an additional market.

This type of business growth is used to reach a market which is previous the untapped by the use of advertising power bank making additional products and adding them to the existing inventory. The money which is generated from organic business growth is required by strategic business growth because the businesses will not experience watershed business acceleration and instead there will be a gradual rise in sales.

Strategic business growth is considered as an unavoidable step for businesses which have reached a plateau in the growth. This type of business growth allows businesses to focus on the long-term plans and use the capital which is stored in order to attain those growth goals. Strategic business growth can be very difficult for startups or the businesses that are producing fewer products then the demand in the market. By far strategic business growth is considered a great strategy to apply when the businesses are looking for long-term planning.

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3) Partnership/Merger/Acquisition

Type of Business growth - 2

For some businesses, it is beneficial to merge or acquire or create a partnership with other businesses. This is also considered as the riskiest strategy of business growth with more potential for success. A valid and executed merger or acquisition can help business to enter, sustain and grow in a new market. It can also help to manufacture more products and gain increased customer loyalty.

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Some consider a joint venture to be also a part of the partnership. Joint ventures have not become very common due to the advantages over partnership and merger and acquisition. The best example of a successful joint venture is the alliance of Starbucks in India with Tata Group.

The Starbucks Tata alliance has successfully started more than a hundred joint venture Starbucks outlets all over India.

4) Internal business growth

Type of Business growth - 3

This type of business growth is considered as both easy and hard to promote a business. This business growth strategy makes the use of resources which are currently available and determine how they can be used in a better way rather than looking outward to production. This type of business growth would include a lean system for implementing business or workforce automation.

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Businesses find it often hard to use Internal business growth because this is not like expanding a business market our expanding a product line but rather the businesses must change entirely the way their business is conducted and that process can be scary to the current employees and managers.

 At times, instead of choosing between strategic and organic growth, internal business growth is a great way to increase resources without significant expense of capital. In fact, internal business growth is seen as a process which helps the business to reduce using of resources and continuing the growth at the same time. This business growth is considered a practical growth strategy.

5) Rapid Business Growth

Type of Business growth - 4

When the growth is needed in a short time rapid business growth is the only option. During this period the production levels or customers or even staff increases at a great pace which can lead to certain risks and challenges. Cash flow shortfalls or customer service issue common for every rapidly growing business organization.

Operational efficiency and outgrown premises are other associated issues. To start a business, they have to take a lot of debt to finance their growth. Also when the growth is fast, the growth rates increase, which tends to make your cash leave your business as well as the costs, will grow in order to accommodate the increased demand. This means that if the growth increases rapidly there is a chance that it can spiral out of control which can put the financial solvency of the business at risk.

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One of the ways to achieve rapid growth while reducing the risk is to buy another business. You can buy the entire business over a part of it and business can be your competitors or it can also be that could complement the existing business. Growing a business is considered to be exciting but it will be worthwhile if you can not only achieve but also sustain the growth.

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About Hitesh Bhasin

Hi, I am an MBA and the CEO of Marketing91. I am a Digital Marketer and an Entrepreneur with 12 Years of experience in Business and Marketing. Business is my passion and i have established myself in multiple industries with a focus on sustainable growth. You will generally find me online at the Marketing91 Academy.

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