organic growth

(redirected from Organic sales)

Organic growth

Refers to growth achieved by internal investments of the firm. This could be the day to day business of the firm or a division of the firm starting a new business from scratch. This is distinguished from growth by acquisition or merger which involves an outside firm.

Organic Growth

The growth rate of a company coming from its operations. Organic growth comes about when a company has solid sales, a large client base, and/or low overhead. Organic growth can lead to an expansion of operation without resorting to issuing securities or borrowing from a bank. Specifically excluded from organic growth is growth resulting from a merger or acquisition. Organic growth is considered a leading indicator of a company's underlying performance.

organic growth

or

internal growth

a mode of business growth which is self generated (that is, expansion from within) rather then being achieved externally through MERGERS and TAKEOVERS. Organic growth typically involves a firm in improving its market share by developing new products and generally outperforming competitors (see HORIZONTAL INTEGRATION), and through market development (that is, finding new markets for existing products). Organic growth may also involve firms in expanding vertically into supply sources and market outlets (see VERTICAL INTEGRATION), as well as DIVERSIFICATION into new product areas.

The advantages of organic growth include the ability to capitalize on the firm's existing core skills and knowledge, to use up spare production capacity and to match available resources to the firm's expansion rate over time. Internal growth may be the only alternative where no suitable acquisition exists or where the product is in the early phase of the PRODUCT LIFE CYCLE. The disadvantages of organic growth are that in relying too extensively on internally generated resources, the firm may fail to develop acceptable products to sustain its position in existing markets, while existing skills and know-how may be too limited to support a more broadly based expansion programme.

For this reason, firms often rely on a combination of internal and external growth modes to internationalize their operations and undertake product/ market diversifications.

See EXTERNAL GROWTH, BUSINESS STRATEGY, PRODUCT-MARKET MATRIX, NEW-PRODUCT DEVELOPMENT.

organic growth (internal growth)

a mode of business growth that is self-generated (that is, expansion from within) rather than achieved externally through MERGERS and TAKEOVERS. Organic growth typically involves a firm in improving its market share by developing new products and generally outperforming competitors (see HORIZONTAL INTEGRATION) and through market development (that is, finding new markets for existing products). Organic growth may also involve firms in expanding vertically into supply sources and market outlets (see VERTICAL INTEGRATION) as well as DIVERSIFICATION into new product areas. The advantages of organic growth include the ability to capitalize on the firm's existing core skills and knowledge, use up spare production capacity and more closely match available resources to the firm's expansion rate over time. Internal growth may be the only alternative where no suitable acquisition exists or where the product is in the early phase of the PRODUCT LIFE CYCLE. The disadvantages of organic growth are that in relying too extensively on internally generated resources, the firm may fail to develop acceptable products to sustain its position in existing markets, while existing skills and know-how may be too limited to support a broader-based expansion programme.

For this reason, firms often rely on a combination of internal and external growth modes to internationalize their operations and undertake product/market diversifications. See EXTERNAL GROWTH, BUSINESS STRATEGY, PRODUCT MARKET MATRIX, NEW PRODUCT DEVELOPMENT.

References in periodicals archive ?
Baby, Feminine and Family Care segment organic sales were unchanged versus year ago as pricing benefits were offset by lower organic volume.
M2 EQUITYBITES-October 28, 2013-Procter & Gamble Company's Q1 core EPS down 1% and organic sales rise 4%(C)2013 M2 COMMUNICATIONS http://www.
But with widespread reports of falling organic sales, Melchett argued the price differential was closing due to increased (non-organic) fertiliser costs.
Organic sales grew at a rate of 5% compared to the flat expectation forecast in April.
The consumer business segment continued the strong upward trend of recent years, with organic sales growth of 3.
Organic sales rose 2 percent, including a 5 percent increase in developing and emerging markets.
Organic sales growth, which excludes exchange rate effects, acquisitions and divestments, was 5%, of which volume accounted for 3% and price/mix for 2%.
SIR; Despite sounding optimistic, IGD is rather pessimistic to predict organic sales will soar by 50% 'to 3bn [pounds sterling] over the next five years' ('Whole Foods factor boosts organic spend', The Grocer, 8 September, p17).
Compared to the same quarter 2010, consolidated net sales increased by 23% to $2,109 million with the organic sales portion growing at a rate of 14%, significantly outperforming global light vehicle production (LVP) which grew by 5%.
We delivered top tier results within the consumer packaged goods industry including full year organic sales of 3.
In the Baby, Feminine and Family Care segment organic sales declined 3% versus year ago as pricing benefits in Baby Care and Feminine Care along with mix benefits in Baby Care and Family Care were more than offset by lower volume in each of the three businesses.
Despite the persistently difficult market environment, all our business units increased organic sales and further improved profitability, said Henkel CEO Kasper Rorsted.