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  • Mergers & Acquistion V/s Organic As A Growth Strategy: Brought To You By

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    This document compares and contrasts mergers and acquisitions (M&A) and organic growth as strategies for company expansion. It outlines benefits of M&A such as rapidly filling gaps, acquiring talent and synergies, but also risks like cultural clashes and marketplace confusion. Organic growth through new markets and products is lower risk but slower. Both approaches have advantages and disadvantages, so companies should consider their unique circumstances to determine the best path for sustainable long-term growth.

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    This document compares and contrasts mergers and acquisitions (M&A) and organic growth as strategies for company expansion. It outlines benefits of M&A such as rapidly filling gaps, acquiring talent and synergies, but also risks like cultural clashes and marketplace confusion. Organic growth through new markets and products is lower risk but slower. Both approaches have advantages and disadvantages, so companies should consider their unique circumstances to determine the best path for sustainable long-term growth.

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    21 views8 pages

    Mergers & Acquistion V/s Organic As A Growth Strategy: Brought To You By

    Uploaded by

    sarthak
    This document compares and contrasts mergers and acquisitions (M&A) and organic growth as strategies for company expansion. It outlines benefits of M&A such as rapidly filling gaps, acquiring talent and synergies, but also risks like cultural clashes and marketplace confusion. Organic growth through new markets and products is lower risk but slower. Both approaches have advantages and disadvantages, so companies should consider their unique circumstances to determine the best path for sustainable long-term growth.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
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    of 8

    Mergers & Acquistion v/s Organic As A Growth

    Strategy

    Brought To You By:-


    SARTHAK KAHNDELWAL IB1816349
    AMAN KUMAR IB1816347
    VEDANT JOLLY IB1816348
    K.C JOHN IB1816351
    ABHISHEK SINGH IB1816346
    K. CHAITANYA IB1816352
    Merger and Acquisition
    Mergers and acquisitions is an aspect of corporate strategy that is dealing
    with the buying, selling, dividing and combining of different companies and
    similar entities without creating a subsidiary.
    Mergers and acquisitions have become a popular business strategy for
    companies looking to expand into new markets or territories, gain a
    competitive edge, or acquire new technologies and skill sets.

    Types of Mergers and Acquisition:-


    → Horizontal
    → Vertical
    → Co-generic
    → Conglomerate
    Situation In Which M&A Have Proven Useful As Growth
    Strategy
    Unlike slow and steady organic growth, growth through acquisition or merger
    is generally much faster and - if done right - can yield a number of other
    almost instant benefits that can help make that rapid growth sustainable.

    1. Fills critical gaps in service offerings or client lists


    2. Efficient way to acquire talent and intellectual property
    3. Opportunity to leverage synergies
    4. Add a new business model
    5. Save time and long learning curves
    Cons Of Growth Through M&A
    Growth through acquisition is rapid and can yield quick results. But the internal
    atmosphere that develops in the time immediately preceding and following an
    acquisition or merger can present a number of management challenges that
    could hinder that rapid growth or plant the seeds of future failure.

    1. Cultural clash
    2. Loss of differentiation
    3. A major distraction
    4. Marketplace confusion
    5. Loss of brand strength
    Organic Business Growth
    Organic growth is also Known as internal growth.
    Organic growth happens when a business expands its own operations
    rather than using takeovers and mergers.
    Organic growth can come from :
    1. Increasing existing production capacity through investment in new
    capital and technology
    2. Development & launch of new products
    3. Finding new markets through exports
    4. Growing a customer base through marketing.
    Advantages of Organic Growth
    1. Less risk than external growth (e.g. through mergers and
    takeovers).
    2. Can be financed through internal funds (e.g. retained profits)
    3. Builds on a business’ existing strengths (e.g. brands, customers)
    4. Allows the business to grow at a more sensible rate in the long
    run.
    5. Less disruptive changes mean workers' efficiency, productivity &
    morale remain high.
    6. Less integration challenges and restructuring
    Disadvantages of Organic Growth
    1. Growth achieved may be dependent on the growth of the overall
    market
    2. Hard to build market share if business is already a leader
    3. Slow growth – shareholders may prefer more rapid growth of
    revenues and profits
    4. Franchises (if used) can be hard to manage / monitor effectively.
    5. Businesses might miss out on opportunities for more ambitious
    growth by only growing internally
    6. May decrease organisation's competitive edge.
    How to choose what’s right for your
    business?
    • It’s usually best to explore both options thoroughly before heading
    too far down either path.
    • The question of whether - to grow organically or inorganically - must
    be answered individually by each business owner based on their own
    unique circumstances.
    • Strategic planning is required to ensure growth is both attainable and
    sustainable over a long enough period to achieve the company’s goals
    and justify the expense and effort required.
    • Keep a sharp eye on your competition - both large and small - and
    look for where synergies can be identified or created so that a merger
    or acquisition creates added value for everyone involved.

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