Learn: Comparing Growth Methods for a Scenario

Welcome!Building on what you've already learned about growth methods, this lesson focuses on comparing different strategies for business growth in various scenarios. You'll learn how to analyse options like organic growth, mergers, and franchising to determine the best approach for a business.

Why Compare Growth Methods?Businesses use different growth methods to achieve their objectives, such as increasing market share or expanding into new markets. By comparing these methods, we can identify the advantages, disadvantages, and suitability of each method for specific situations.

Organic GrowthOrganic growth refers to growth achieved through internal development, such as increasing production capacity, launching new products, or expanding into new markets. This method is often slower but can be more sustainable as it builds on existing resources.

External GrowthExternal growth occurs when a business expands through mergers, acquisitions, or partnerships. This method is often faster than organic growth and can provide access to new markets, resources, or expertise.

FranchisingFranchising is a growth method where a business allows others to operate under its brand name in exchange for fees or royalties. It enables rapid expansion with lower investment since franchisees fund their own locations, but it requires strong brand management to ensure consistency.

Key Factors to ConsiderWhen comparing growth methods, consider factors such as cost, speed of implementation, risks, control, and alignment with the business's objectives. For example, franchising may be ideal for rapid expansion, while organic growth might be better for building long-term stability.

Review Time!Great work! You've learned about organic growth, external growth, and franchising, along with their advantages and disadvantages. Now let's test your understanding with a few review questions.