Company Growth Strategies: Organic and Non-Organic

Company growth strategies
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Growth is the primary objective of practically every company. From small-town mom-and-pop shops – looking to increase profits to fund a vacation, – to middle-market businesses – trying to expand into the larger business world, – growth is a focal point that will never change. 

However, growth is a complicated process in the business world. It looks different for everyone depending on individualized goals and strategies, and there are two different core types of growth that have to be considered. 

In this article, we’ll go over 6 company growth strategies that can help you achieve your goals. 

Why is Growth Important?

Growth is a broad term in the business world. Obviously, on the surface, it simply means that a company is getting bigger and better.

However, that can mean increasing profits, growing a target audience, penetrating new markets, or going the distance and expanding into a multi-location international business. 

In general, growth is important, because it not only means you’re reaping more rewards from your efforts, but it also means your company is healthy and likely to keep performing admirably well into the future.

Stagnation, or even decline, shows the opposite. That’s when you need to start rethinking your approach, or you might end up closing your doors. 

The Two Types of Growth

While growth can take many forms, the actual means of achieving it can be summed up with two core concepts.

Company growth strategies: organic and non-organic growth strategies

Before we dive into the various strategies each one uses, we’re going to give a brief overview of each one.

Organic Growth

Organic growth is what you’re likely used to. This is growth that occurs naturally over time. However, don’t let that convince you that it just magically happens if you do well. There’s a lot of work that goes into organic growth. 

This is the type of growth that you gain when you put in the effort to draw in new customers, cut back on unnecessary expenses and money pits, penetrate new markets, and generally strive to make the company perform more effectively. 

Organic growth tends to take plenty of time and resources to achieve, but it’s also the safest form of growth to pursue.

Non-Organic Growth

Non-organic growth skips all the hard work and time-consuming stuff in favor of drastic measures. That doesn’t mean it’s a bad approach, though. Sometimes, it’s the best approach you can take to boost growth and reach new heights. 

With non-organic growth, growth is typically streamlined. You don’t have to focus as much on long-term marketing strategies, winning over customers, and all that. Instead, you quickly gain the ability to penetrate new markets, take advantage of the reputation and capabilities of acquired assets, and more. 

However, that comes with quite a bit of risk. If you notice that your growth goals aren’t getting furthered by a 3-year marketing plan 4 months into it, you can always divert funds and try something new. If you go through with a multi-million-dollar transaction with contractual obligations, and that falls through, the consequences can be dramatic. 

That’s not something that should deter you, though. Instead, it should convince you to strategize appropriately and make good decisions that minimize that risk. 

Strategies for Organic Growth

The strategies used to build organic and non-organic growth differ dramatically. They’re two entirely different processes

We’re going to go over some of the most common strategies used to generate both. Starting with organic growth. 

1: Marketing Enhancement

One of the main strategies used for organic growth is marketing enhancement

For many companies, the only thing dragging them down is a lack of proper marketing. Especially in the small and middle-sized markets. 

The idea of this strategy is to boost marketing potential by routing funds into endeavors such as online marketing which includes search engine marketing (SEM), search engine optimization (SEO), social media branding and marketing, etc.

Company growth strategies: organic - search engine optimization

The reason this helps with organic growth is that when done properly, it brings in new customers who are ready to convert. More conversions equate to higher amounts of revenue, and more revenue means that smart financial moves can be made to grow the business overall. 

One of the positive aspects of this strategy is that it’s built around creating long-term customer relationships. You’re not just trying to bring in random people with this strategy. You’re targeting high-value customers who are likely to keep coming back for more.

So, the results tend to be long-lasting as long as you live up to your end of the bargain by meeting demands and maintaining standards. 

However, it also takes a considerable amount of time and resources. With online marketing strategies dominating the business world, it can be cheap in a financial sense, but you typically don’t see meaningful results for months after your efforts kick into full swing. 

2: Rebranding

Sometimes, your branding simply isn’t appealing to the audience you’re trying to attract, and you end up with lackluster sales. As such, a rebranding strategy can be used to initiate growth

Think about a phone company that offers simple and easy-to-use phone models. They lack the power to handle what today’s youth is into, but they handle their primary function of calling and texting just fine. The company selling them is branded entirely toward the 18-30 target demographic that is primarily interested in the latest iPhone.

In that situation, marketing efforts, and the company’s overall branding, just wouldn’t convert sales easily. 

However, a rebranding could fix that. Rather than targeting the youthful crowd that wants the latest features and will pay anything to get them, the company might rebrand as a senior-friendly phone provider due to the easy-to-use and affordable nature of its products. 

Suddenly, the company goes from having hardly any customers to penetrating a large market with unmet needs in the larger market, and the company starts thriving. 

Sometimes, rebranding strategies aren’t that dramatic. It can be as simple as shifting a fun and exciting food brand to something more eco-friendly themed, or an influencer adjusting their branding to appeal to the audience that has grown with them over the course of two decades.

Each situation is different. 

3: Diverting Funds from Money Pits to Bread Winners

Finally, another common strategy has less to do with bringing in new customers or adjusting the brand and more to do with the financial side of the business. 

If any business owner takes the time to generate a comprehensive earnings and expenses report for the entire business, they’ll notice one thing. Certain things perform better than others. 

That can mean that certain products are selling a lot better than a product you overestimated, a division of the company might be struggling while another is outperforming expectations, different marketing channels can be performing differently, etc. 

The focus of this strategy is to identify what isn’t performing and what is. Then, you divert funds and resources to the efforts that are performing well, and you make judgment calls on the underperforming endeavors. 

For example, let’s say you have a social media marketing campaign that you’re putting $15,000 per year into, and it’s generating tons of new customers and driving sales. However, you’re putting $50,000 into traditional marketing methods that are barely creating any conversions.

With this approach to organic growth, you’d take funds away from that traditional marketing campaign, and you’d use the newly freed funds to boost your social media efforts and engage with what’s working. 

This generates growth by promoting the efforts that are working efficiently to encourage even more results while limiting, or completely removing, money pits that aren’t doing much. 

This method does require you to have a keen understanding of which efforts are producing real results, though. You also have to consider temporary results and make decisions based on long-term reports. 

Non-Organic Growth Strategies

When talking about organic vs non-organic growth, organic growth tends to get the most attention, because it’s the most low-risk option.

Company growth strategies: non-organic low-risk strategies

However, the following non-organic strategies are often used to tremendous effect, and eventually, when your organic growth methods have reached their peak, non-organic growth might be your only option. 

Here are some strategies you can use. 

1: Joining Forces for Unparalleled Growth

One of the most common non-organic company growth strategies is for two companies to merge. When two companies merge, it’s a lot like joining forces. Suddenly, they go from being rivals to being able to combine resources, experience, brand reputations, and capabilities to generate a mutually beneficial situation. 

However, this is a risky move in a lot of situations. 

First, the two companies need to be compatible. Many mergers fail because of cultural differences, operational differences, or even worse, fraudulent depictions of one party’s ability to add to the endeavor. 

This means that you have to do your due diligence, handle the entire process as optimally as possible, ensure that there are plenty of synergies between both parties, and have a solid plan for post-merger integration to avoid conflicts from ruining a perfectly good deal. 

With all that said, merging with the right company can take two high-performing companies and turn them into one powerhouse that rocks an entire industry, and it can happen pretty quickly

2: Acquiring Helpful Assets and Businesses

Have you ever been in competition, or seen a smaller company using something they have patented to great effect and thought “If I had that patent, I could take this business to all new heights”? 

Well, that’s one way acquisitions are used to generate growth. 

Sometimes, you can spot an asset being used to great effect, or you might see underutilized potential in it that you’re more capable of leveraging than the owner. In that case, working to acquire that asset can make a tremendous impact on your company’s growth

This isn’t just about patents, either. That’s simply an example. You can acquire trademarks, patents, fruitful contracts, equipment, exclusive rights, or even entire companies or parts of companies. 

As long as you have a distinct purpose for acquiring it, and you have a plan to use the asset effectively to boost your goals, making an acquisition can quickly streamline your journey to growth. 

3: Cornering the Market via Mergers and Acquisitions

Imagine owning a business in a city and selling high-end shoes. You have one competitor, and you both split the target audience fairly evenly. That’s a great situation, and you’re likely thriving, but you’re also missing out on half the target audience in your local area.

Company growth strategies: non-organic strategies for target audience

What happens if you and the other company merge? Suddenly, you go from competing to maintain your share of the target audience and hopefully taking some of the rival’s share, to joining forces and cornering the entire market in that area. Both parties prosper, there’s no more fighting back and forth, and it becomes harder for the market to be penetrated by someone else in the future. 

That’s an insanely simplistic way to describe it, but the general concept is illustrated. 

You can use M&A to make growth-friendly environments, breach other markets, and more

Another example would be a gas station that’s very popular in the US seeing a high likelihood of success in the Japanese market, but not being able to penetrate that market due to a lack of brand recognition in Japan. Rather than simply leave the market alone, one could merge with a well-known Japanese gas station brand, or acquire it outright, and gain access to the Japanese market without focusing on organic growth in the area for years on end. 

Organic VS Non-Organic Growth – Final Verdict

The situation is always described as organic vs non-organic growth, and that leads business professionals to look at the two as completely opposing forces. The truth is, that these company growth strategies often work in tandem, and even when they don’t, neither is better than the other. 

Sometimes, you’ll use organic strategies to get to a certain point, and then you’ll use non-organic growth to reach new heights. Sometimes, you’ll use non-organic growth to penetrate a new market, and then you’ll switch to organic growth to grow your position in that market. 

It all depends on your unique situation and the factors surrounding it.

In case all of this seems overwhelming to you, don’t worry, we’re here to help. Final Ascent’s M&A advisors have one mission – to aid you through the whole process, from start to finish.
Whether you’re looking for guidance to make your exit from the business world, or you’re ready to take the M&A route to thrust your business into a whole new level of growth, contact Final Ascent for professional guidance today!