Internal growth is when a business expands using its own resources.
External growth is when a business expands by using another business’s resources.
Remember for the exam:
Developing New Products
Developing new products can be a powerful driver of internal growth. By creating new and innovative products, a business can expand its Product range, attract new customers and gain a competitive advantage in the market. This can lead to increased revenue and profitability and can link into.
Apple could expand internally by creating a new product that combines the features of an iPhone and an iPad, like Samsung with the S22 and the sPen.
Updating Current Products
This involves making improvements to existing products to make them more appealing to customers. For example, a clothing company could update the fabric or design of a popular shirt to make it more fashionable. This method can help a company retain customers and maintain market share.
Porsche could expand internally by updating the design and features of their popular model to make it run on electric rather than petrol/ diesel.
Entering New Markets
This involves expanding the business into new markets or areas where it does not currently operate. For example, a company that sells beauty products could enter a new market by selling its products in a different country. This method can increase the company’s customer base and revenue.
DFS could expand internally from sofas into the commercial office furniture market to cater to the needs of businesses and corporations.
Geographical Expansion
This involves expanding the business into new geographical areas. For example, a restaurant chain could open new locations in different cities or countries. This method can help a company reach new customers and increase revenue.
Mcdonalds could expand internally by opening in a new country by opening up several new franchises in the region.
