Organic Growth (Edexcel A Level Business): Revision Note

Organic business growth

• Organic growth is growth that is driven by internal expansion using reinvested profits or loans

Types of organic growth

Gaining greater market share

• By attracting more customers from competitors or increasing sales to existing customers, a business can grow its revenue without merging or acquiring another firm

  • E.g. Aldi has gained UK market share by offering low prices and expanding its product range

Product diversification

• Launching new products allows a business to target new customer needs, increase sales, and reduce reliance on just one product

  • E.g. Innocent has moved from smoothies into fruit juices and snacks

Opening a new physical or online store

• Expanding the number of physical locations helps a business reach more customers and grow sales in new areas.

  • E.g. Greggs has opened new outlets across the UK high street and within travel hubs such as railway stations

• Launching an online store helps a business reach more customers and grow sales in new areas or through new channels

  • E.g. Primark launched its online click-and-collect service to reach more customers while keeping its focus on physical stores

International expansion

• Selling products in other countries allows a business to access larger markets and benefit from new customer bases

  • E.g. WHSmith has expanded into airport locations worldwide whilst reducing its presence on UK high streets

Investing in new technology or production machinery

• Improving production efficiency can increase output and reduce costs, allowing a business to meet rising demand and grow

  • E.g. Jaguar Land Rover invested in robotics and automation at its Solihull factory to boost production of electric and hybrid vehicles, helping it grow in the fast-changing automotive market

Evaluating organic growth