Organic growth is an increase in revenue that is driven by a firm's business capabilities in areas such as marketing, innovation and operations. The term is meant to exclude growth obtained by buying or merging with other companies. In some cases, a firm looks like it is growing because it is acquiring smaller firms but its core business is actually in decline. The following are examples of organic growth.
Branding & PromotionIncreasing market share by promoting products and improving brand awareness.
Innovation & Product DevelopmentDeveloping products to increase market share or enter new markets.
Sales & DistributionImproving sales by expanding or improving sales operations and distribution partnerships. For example, a firm might find distribution partners to sell products in a new territory.
Customer RelationshipsImproving customer experience to increase customer lifetime value.
OperationsBottom-line growth can be improved by reducing costs through operational efficiency. Market share can be improved by providing a service that is higher value than the competition. For example, a delivery service that is more reliable than the competition may gain market share.
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